Sterling performed well yesterday

GBP/USD

Range: 1.6016 – 1.6088

Support: 1.6000

Resistance: 1.6150

Sterling performed well yesterday, catching a short market with stronger services PMI numbers. GBP rallied particularly well against the Euro. EUR/GBP held the 0.8970 level and I would use this as we head into the week’s main events – BoE and ECB interest rate announcements tomorrow and US non-farm payrolls on Friday.

EUR/USD

Range: 1.4416 – 1.4467

Support: 1.4380

Resistance: 1.4490

The euro was punished in thin market conditions in the New York session last night as ratings agency Moody’s downgraded Portugal to Ba2 (negative outlook ) from Baa1. Portugal now joins Greece as the only sub-investment single currency member. With a lack of data releases today, I would think that this market will be dominated by headlines on the European crisis to the debt ceiling issue in the US. Clearer markets should start tomorrow as we head into the business end of the week, with the ECB expected to hike rates by 0.25% to 1.5% but it will be Jean-Claude Tritchet’s press conference that the market will really be focusing on as a gauge to further tightening.

AUD/USD

Range: 1.0683 – 1.0734

Support: 1.0600

Resistance 1.0800

The Australian dollar continues to hold support on expectations that the RBA will have to hike rates, although this hike is now not seen until later in the year with October or November now being priced in as the likely months. AUD broke its two-day losing streak against the US dollar, with gains in the Asia session as markets look for a stronger labour report that is due to be released in the Asia session on Thursday.

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