EUROPEAN session review: EU officials noted crisis still continues

Data released (actual, consensus, previous):                      

06:00 GMT Germany Consumer Price Index (YoY) (Jun)  1.8%    1.8%    1.5%         

06:00 GMT Germany Consumer Price Index (MoM) (Jun)   0.1%    0.1%    0.4%         

06:00 GMT Germany Harmonised Index of Consumer Prices (MoM) (Jun) 0.1%    0.1%    0.3%    

06:00 GMT Germany Harmonised Index of Consumer Prices (YoY) (Jun) 1.9%    1.9%    1.6%         

06:45 GMT France Current Account (May) €-4.1B   _     €-2.8B         

06:45 GMT France Industrial Output (MoM) (May)  -0.4%    -0.8%    2.2%        

The U.S. dollar was lower against the main currencies, with investors awaiting further insight on the U.S. Federal Reserve’s time frame for paring the pace of its monetary stimulus. Investors will read through minutes from the Fed’s meeting in June for further clues as to when the central bank may start tapering its quantitative-easing program. 

ECB member Christian Noyer, who spoke today at a financial conference in Paris, saw downside risks to the Eurozone economy and reiterated that the ECB's monetary policy would remain accomodative for as long as needed. The forward guidance on rates, introduced by Mario Draghi last week, was consistent with the central bank's mandate.

EURO:

Euro rose a bit but ECB member Cœure noted that Eurozone is still engulfed in a severe crisis and it makes problems for the government. 

EUR/USD trades near resistance $1.2730. Next resistance is $1.2880. Initial support is at $1.2780. Below losses may widen to $1.2660 (Dec 13’2012 lows).

POUND:

The pound rose from a three-year low versus the dollar amid speculation a recent selloff was excessive before inflation data due next week. Moreover, Moody's upgrades UK banking system outlook. 

GBP/USD has tested support at $1.4820 perfectly (March, 12 minimums). Though we can see some corrective move, bearish moods on pair still prevail. Pound will continue to drop if Ben Bernanke shows hawkish accents in his today’s speech. In this case $1.4420 will be a target for pound. Strong resistance now is at $1.5130 area.

YEN:

Deputy economic minister Nishimura noted he expects BOJ to continue easing policy. To reach 2% inflation target BOJ should communicate with market to stabilise rates.

USD/JPY fell to Y100.20 with support comes at Y99.90 (Friday’s low) and Y99.50 (Jul 4 low). Resistance is around  Y101.00, then - at Y101.50, above - near Y102.70 (channel line from Jun 14), then - at Y103.70 (May 22 high).

DATA AHEAD:

At 18:00 GMT, the focus will be on FOMC Minutes. 

At 22:30 GMT New Zealand’s Jun  Business PMI . 

At 23:50 GMT Japan reports May Machinery Orders with 1.3% m/m and 2.5% y/y expected after -8.8% and -1.1% earlier respectively.

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