Foreign Exchange Interbank Rates Overnight/Morning Ranges:
Interbank Rates EUR/USD 1.3280 – 1.3380
Interbank Rates GBP/USD 1.5834 – 1.5882
Interbank Rates GBP/EUR 1.1865 – 1.1940
It looks as if the Euro short covering seen late last week has run its course for now. After starting 2011 with the sovereign debt issues weighing heavily on the euro last week saw a move to the upper end of the recent trading ranges after comments from the Chinese earlier in the week that they would like a stable euro and were prepared to buy European debt starting a short covering rally that grew in momentum after Mr. Trichets post rate decision press conference comments on inflation. Attention now switches to the Euro group meeting in Brussels today with markets watching closely for any news on changes to the European safety net fund.
Cable moved higher last week also trading to the upper end of its recent trading range against the USD at around the 1.5900 level. With the US markets closed today for Martin Luther King day any major surprise from the EU meeting could result in an exaggerated move in thin markets later this afternoon. Barring any major announcements the recent trading ranges should cover any moves in the major currencies.
EUR/USD currently 1.3255. Support 1.2900, Resistance 1.3500
GBP/USD currently 1.5844 Support 1.5300, Resistance 1.5900
GBP/EUR currently 1.1949 Support 1.1600, Resistance 1.2050
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