US session review: Euro falls below $1.30 on Draghi pledge

Data released (actual, consensus, previous):                 

12:30 GMT USA Gross Domestic Product Annualized (Q1)  1.8%    2.4%    2.4%        

12:30 GMT USA Gross Domestic Product Price Index (Q1)  1.3%    1.1%    1.0%        

12:30 GMT USA Personal Consumption Expenditures Prices (QoQ) (Q1)  1%    1%    1%        

12:30 GMT USA Core Personal Consumption Expenditures (QoQ) (Q1)   1.3%    1.3%    1.3%        

14:30 GMT USA EIA Crude Oil Stocks change (Jun 21)  0.018M    -1.900M    0.313M

The euro fell below $1.30 for the first time in almost a month as European Central Bank President Mario Draghi said monetary policy will remain stimulative, dimming the relative allure of assets denominated in the currency.

The Frankfurt-based ECB cut its benchmark interest rate to a record-low 0.5 percent in May after six consecutive quarters of contraction in the 17-nation currency-bloc economy.

Australia’s dollar rose after Rudd defeated Gillard in their third face-off to head Australia’s governing Labor party in three years.

The New Zealand dollar gained versus all of its major peers after reassurances from China that it will ease a credit squeeze spurred demand for higher-yielding assets.

Data released showed US Q1 GDP gain was revised down to 1.8% from 2.4% previously estimated, diminishing expectations the Fed could taper its stimulus program soon and weighing on the greenback.

EURO:

Initially the euro rose after the data showed German consumers are optimistic about the summer, with the GfK consumer-climate study forecasting a value of 6.8 points in July, up from 6.5 points in June.

But later the euro has got under presures as European Central Bank President Mario Draghi said the euro-area economy’s condition still requires a stimulative monetary policy.

EUR/USD broke under $1.3000 and challenged $1.2980 (initial support). Below support comes at $1.2960 (Apr 24 and Jun 3 lows) и $1.2840 (May 29 lows). Key support remains at $1.2800 (May 17 low). Resistance comes at $1.3060 (hourly highs and Jun 24 lows). Above gains may extend to $1.3160 (Jun 20 lows), then - at $1.3255/60 (Friday’s high) and $1.3300 (Jun 6 high).

POUND:

The pound remains under pressure after BOE’s Miles said UK economic recovery remains weak, assets buys might help.

Also BOE Tucker noted the rates will only rise when economy has "achieved escape velocity"

GBP/USD remains under pressure, holding a bit higher strong support at $1.5300/90 (61.8% Fibo of the $1.5000 - $1.5750 rally). Below losses may widen to $1.5140 (May 24 high and May 31 lows), then - to $1.5000 (May 29 lows). Initial resistance comes at $1.5400 (hourly high), then - at $1.5450/60 (Friday’s hourly highs) and $1.5530 (Jun 21 high).

YEN:

The yen fell to daily lows after the final reading of the US Q1 GDP showed the economy grew at a slower pace than previously estimated.

USD/JPY fell to Y97.50 and could find immediate supports at Y96.95 (Jun 25 low), extending to Y96.80 (Jun 20 low) and Y96.50 (200-hour SMA), while resistances line up at Y98.25 (daily high), Y98.70 (Jun 24 high) and Y99.00 (psychological level).

DATA AHEAD:

At 22:45 GMT New Zealand reports May Trade Balance.

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