EUROPEAN session review: the market stays calm

Data released: 

09:00 EMU Consumer Confidence (Aug) -16.0 -16.5 -17.4 

09:00 EMU Business Climate (Aug) -0.20 -0.35 -0.53 

09:00 EMU Economic Sentiment Indicator (Aug) 95.2 93.0 92.5 

09:00 EMU Industrial Confidence (Aug) -8.0 -9.9 -10.6 

09:00 EMU Services Sentiment (Aug) -5.3 -7.8 

09:00 EMU Consumer Price Index (YoY) Preliminar 1.3% 1.4% 1.6% 

09:00 EMU Unemployment Rate (Jul) 12.1% 12.1% 

The main currecies trade in the narrow ranges, as investors remain reluctant to take on significantly new positions ahead of the long weekend in the U.S., especially so when there remains so much uncertainty in the air. Earlier dollar headed for its biggest weekly gain in almost two months against the euro amid speculation U.S. reports will strengthen the case for reduced stimulus from the Federal Reserve. 

EURO 

The euro stabilized as Euro-Area economic confidence surges to 2-year high. 

EUR/USD trades at $1.3232. Below losses may widen to $1.3200/90 (Feb 22 lows). If rate resumes recover the further rise may be capped by the resistance at $1.3450 (Aug 20 high) and $1.3520 (Feb 13 high) extending to $1.3560 (channel resistance line from Jul 10). 

POUND 

The pound eased despite a measure of British consumer confidence increased in August and a gauge of house prices rose. 

Bank of England Governor Mark Carney on Wednesday failed to convince investors that the central bank will keep interest rates at an all-time low. 

GBP/USD stays on moning levels. Initial support comes at $1.5480 (Aug 27 lows), but the key support remains near yesterday’s lows at $1.5430 (also channel support line from Jul 9). Below losses may widen to $1.5390 (channel support line from Aug 21). Initial resistance remains at $1.5550 with a break above targets $1.5610/40 (Aug 26 and 23 respectively) and $1.5715 (Aug 21 highs). 

YEN 

The expectations of a September tapering to be maintained but geopolitical events in the Middle East might counter any upside enthusiasm in USD/JPY. 

USD/JPY has tested Y98.50. Key resistance is around Y99.00 (channel line from Jul 8). 

Closest support at Y96.60 (channel line from Jun 13 and the lower bound on the 4-hour charts). Break under may open the way to the channel line from Jul 8 at Y94.80. 

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