EUROPEAN session review: Yen advances amid U.S. budget talks

Data released:

06:00 GMT Germany Gfk Consumer Confidence Survey (Oct) 7.1 7.0 7.0 

06:00 GMT Switzerland UBS Consumption Indicator (Aug) 1.32 _ 1.41 

06:45 GMT France Business Climate (Sep) 97 99 98 

10:00 GMT UK CBI Distributive Trades Survey - Realized (MoM) (Sep) 34 24 27 

The U.S. Senate is set to hold a test vote today on legislation passed by the House of Representatives to cover federal spending through Dec. 15, and choke off funds for President Barack Obama’s health-care law. The debate may extend past a Sept. 30 deadline. The next fiscal year begins Oct. 1.

EURO

The single currency remained almost indifferent after the Gfk Survey in Germany.

The German Consumer Confidence gauged by the Gfk Survey improved to 7.1 for the month of October, exceeding both expectations and September’s print at 7.0. The pair would remain range-bound ahead of the more relevant data in the US economy from Durable Goods Orders and New Home Sales.

EUR/USD consolidates below $1.3500. Strong resistance comes at $1.3570 (Sep 19 highs), extending to $1.3600 (Feb 5 and 6 highs) with the stronger resistance is near yearly high on $1.3712. Initial support comes at $1.3460 (session low and 23.6% Fibo of the $1.3100 - $1.3570 rise).

POUND

The market’s focus on UK docket Later on during the European morning the CBI Distributive Trades Survey is due although market participants remain focused on tomorrow’s GDP figures for the second quarter. Prior estimates see the UK economy to have expanded 0.7% inter-quarter and 1.5% on a yearly basis, extending the momentum of the nascent recovery. 

GBP/USD consolidates near $1.5990 (23.6% Fibo of the $1.5460 - $1.6140 rise). Below support comes at $1.5890 (Sep 16-18 lows and 38.2%). Initial resistance is around Monday’s highs on $1.6070, above - at $1.6145 (Sep 18 highs). 

YEN

The yen continues to strengthen as a safe-heaven currency amid concerns about a possible U.S. government shutdown. 

USD/JPY holds steady at Y98.60 (Sep 16 and 6 lows respectively). Below support comes at Y98.30 (channel line from Aug 8) and Y97.60/50 (trend lines from Jun 13 and Jul 8 crossing). Minor resistance is near Y99.20 (yesterday’s high), above - at Friday’s highs on Y99.65. Further rise may extend gains to Y100.00 (Sep 13 highs) and Y100.60 (Sep 11 highs).

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