Euro weakness persists ahead of ZEW surveys Major US equity indices just barely make into positive territory yesterday; despite the gains registered performances were marginal. Asian equities appeared mixed this morning. In the absence of significant economic data and events it is the ongoing geopolitical developments which seem to be the main driver of sentiment. Yesterday Russia said that it was coordinating with the Red Cross to send aid to Ukraine. EUR/USD is facing significant selling pressure this morning as it challenges the second intraday support level at 1.3363, we have already seen session lows of 1.3360 up to the time of writing. Seen against the rest of the major currencies, the euro is losing ground ahead of the closely watched ZEW expectations data out of Germany and the EZ region due later today. Consensus figures are pointing towards a softer reading for the German August data. The USD is up 0.17% so far today, against a basket of currencies measured by the Bloomberg Correlation-Weighted Currency Index (BCWI). The USD was stronger against the JPY as well with the USD/JPY continuing to build support onto yesterday’s bullish move. However the USD/JPY is struggling to take on the second intraday resistance at 102.31 – currently the price is at 102.29. The weaker Yen was to be expected, as the broader geopolitical tensions show some signs of easing; and at this point in time it is only safe haven flows which can lend support to the Japanese Yen. We are expecting 2Q preliminary GDP data out of Japan early into tomorrow’s session. Consensus figures are pointing towards a Q/Q contraction of -1.8% after the previous +1.6%. The BoJ will also be releasing the minutes of the July meeting. Good Day and happy trading!
Posted on: Tue, 12 Aug 2014 07:35:34 +0000
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