US session review (28.08.2013):

Data released:

06:00     Germany     Import prices (July) Y/Y    -2.6%    -2.5%    -2.2%

08:00     Italy     Retail sales (June) adjusted    -0.2%    0.1%    0.1%

08:00     Italy     Retail sales (June) Y/Y unadjusted    -3.0%    -    -1.2 (-1.1)%

08:00     EU(17)     M3 money supply (July) adjusted Y/Y    2.2%    2.2%    2.3%

08:00     EU(17)     M3 money supply (3 months to July) adjusted Y/Y    2.5%    2.6%    2.8%

The dollar rose the most in a week as the prospect of U.S. military action against Syria deterred risk-taking and prompted investors to buy the safest assets.

The dollar advanced as a United Nations team was on the ground in Syria gathering evidence to establish use of chemical warfare, Secretary-General Ban Ki Moon said today. Syrian President Bashar al-Assad’s government has denied the employment of chemical weapons.

U.S. officials planning potential military strikes on weren’t limiting themselves to a one-day operation, an administration official said, as the UN Security Council’s permanent members considered a resolution condemning last week’s suspected chemical attack.

EURO

Euro trades in flat despite of high volatility.

EUR/USD holds under $1.3300 in a volatile session. Rise above $1.3400 may be capped by the resistance at $1.3450 (Aug 20 high) and $1.3520 (Feb 13 high) extending to $1.3540 (channel resistance line from Jul 10). Initial support comes at $1.3320 (daily lows) and $1.3200/90 (Feb 22 lows).

POUND

Sterling reversed a decline versus the euro after Bank of England Governor Carney said forward guidance will help the economic recovery in his first policy speech since taking over on July 1. He also said the BOE is focused on sustaining the economic recovery despite the “inevitable shocks ahead.”

The pound gained 2.1% against the greenback this month, the best performance among the major currencies. The euro and yen each gained 0.2%.

GBP/USD remains within the downward channel from Aug 21, limited today by $1.5560 - $1.5430 (strong resistance and support respectively). Above $1.5560 resistance is near $1.5610/40 (Aug 26 and 23 respectively) and $1.5715 (Aug 21 high). Initial support comes at $1.5480 (daily lows) and below - at $1.5430 (channel line).

YEN

USD/JPY could’t break below Y96.80 and came back to Y97.80. Breaking through Y97.80 would make possible testing of Y98.30. Key resistance is at Y99.00 (channel resistance from July,8).Breaking below Y96.50 would open the door to Y95.00/Y94.90 area.

COMMODITY CURRENCIES:

The Australian dollar fell against most of its 16 major peers s as the prospect of an expanded Middle East conflict damped demand for emerging-market currencies. U.S. Treasury 10-year note yields climbed from the lowest level in almost two weeks before a government report tomorrow forecast to show the economy grew more last quarter than earlier estimated.

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