EUROPEAN session review: G8 insists recession in EU still exixts

Data released (actual, consensus, previous):                    

08:30    UK    GBP    Core Consumer Price Index (YoY) (May)       2.2%    2.1%    2.0%         

08:30    UK    GBP    Consumer Price Index (MoM) (May)   0.2%    0.1%    0.2%         

08:30    UK    GBP    Consumer Price Index (YoY) (May)   3.1%    2.6%    2.4%         

08:30    UK    GBP    DCLG House Price Index (YoY) (Apr)     2.6%    2.6%    2.7%         

08:30    UK    GBP    PPI Core Output (YoY) n.s.a (May)  0.8%    0.9%    0.7% 

09:00    EMU    EUR    ZEW Survey - Economic Sentiment (Jun)    30.6        27.6         

09:00    DE    EUR    ZEW Survey - Economic Sentiment (Jun)   38.5    38.1    36.4         

09:00    DE    EUR    ZEW Survey - Current Situation (Jun)  8.6    9.5    8.9

G8 leaders, who hold a two-day summit in Enniskillen in North Ireland this week, call Eurozone countries to increase efforts to form a banking union in the area. 

The G8 emphasized the importance of the process of building the banking union acceleration and generally of propping up the Eurozone economy. The officials insisted that it was necessary to continue implementing reforms as the area still remains in recession, even though the impact of the crisis has been waning. 

The outlook for the global economy is concerned, the G8 agreed that it remains weak. 

The Federal Open Market Committee, the Fed’s interest-rating setting body, is due to begin its meeting Tuesday and release its policy decision Wednesday. 

However, investors don’t think they will get clear messages because  it’s not clear if the Fed themselves really have a clear plan as to when they’ll do it.

EURO:

The euro on Tuesday slipped after Draghi said ECB has 'open mind' on non-standard monetary policy but gained later after strong  ZEW  data. 

EUR/USD is trading not far from $1.3400 (initial resistance, Jan 14 highs). Further  resistance comes at $1.3480, then - near $1.3540 (channel resistance line from May 29).Support is around $1.3330 ( channel support line from May 29) Below support is around $1.3280 (Jun 13 lows), $1.3200 and $1.3170 (Jun 10 lows).

POUND:

The pound is extending its losses e after UK inflation data. 

GBP/USD is on the way to $1.5600 (psychological level). Next support is on $1.5520 area. Resistance comes at last week’s highs on $1.5740 (also 4-months highs), next resistances could be found at $1.5765 (Feb 7 high) and $1.5800 (psychological level).

YEN:

The yen dropped versus all most-traded counterparts as stocks around the world gained, damping demand for haven assets. 

G8 leaders call Japan to come up with a credible medium-term fiscal program. 

USD/JPY currently probes Y95.30. Minor support placed at Friday’s lows on Y94.00, extending to Y93.80 (Jun 13 lows). Below support comes at Y93.50 (Mar 25 lows) and then - at Y92.50 (Apr 2 lows). Resistance is around Y96.20 (Jun 12 hourly highs) and Y97.00 (Jun 12 highs).

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