EUROPEAN session review: Euro fell under $1.3500.

Data released:                                                              

06:00 GMT Germany Import Price Index (YoY) (Aug) -3.4%    -3.8%    -2.6%         

06:00 GMT Germany Import Price Index (MoM) (Aug)  0.1%    0.1%    0.1%        

06:45 GMT France Consumer Price Index (EU norm) final (MoM) (Sep) -0.2%    -0.2%    0.5%         

06:45 GMT France Consumer Price Index (EU norm) final (YoY) (Sep)   1%    1%    1%         

08:30 GMT UK Consumer Price Index (MoM) (Sep) 0.4%    0.3%    0.4%         

08:30 GMT UK Consumer Price Index (YoY) (Sep) 2.7%    2.6%    2.7%         

08:30 GMT UK Core Consumer Price Index (YoY) (Sep) 2.2%        2.0%         

08:30 GMT UK DCLG House Price Index (YoY) (Sep) 3.8%    3.6%    3.3%         

08:30 GMT UK Producer Price Index - Input (MoM) n.s.a (Sep) -1.2%    -0.4%    -0.7%    Revised from -0.2%     

09:00 GMT EMU ZEW Survey - Economic Sentiment (Oct) 59.1    59.4    58.6         

09:00 GMT DE ZEW Survey - Current Situation (Oct) 29.7    31.0    30.6         

09:00 GMT DE ZEW Survey - Economic Sentiment (Oct) 52.8    49.6    49.6    

Investors welcomed signs U.S. lawmakers are making progress in hammering out a deal to raise the debt ceiling before the deadline on Thursday to avoid a technical default.

EURO

EUR/USD fell to fresh lows near $1.3500. 

Mixed results from the German ZEW Survey showed that Economic Sentiment rose to 52.8 for the month of October and Current Situation dropped to 29.7 vs. forecasts at 49.6 and 31.0, respectively. In the same tone, EMU’s Economic Sentiment rose to 59.1, missing the median at 59.4.     

 

EUR/USD has tested support at $1.3480. A break under widens losses to $1.3400.00. Resistance remains at $1.3600 (Oct 8 and 14 highs). Above resistance is near $1.3640 (Oct 3 high).

POUND 

GBP/USD initially rallied after the UK inflation figures, printing highe above $1.6000. 

Data showed the consumer prices in the British economy rose above estimates in September, 0.4% inter-month and 2.7% on a yearly basis, matching August’s prints. In the same direction, house prices gauged by the DCLG index rose at an annual pace of 3.8%, beating forecasts at 3.6% and the previous gain of 3.3%. Further data showed Retail Prices advancing 0.4% MoM and 3.2% over the last twelve months. 

GBP/USD remains below $1.6000. Resistance extends to $1.6020, ahead of  $1.6120 (Oct 8 high). Above $1.6260 (Oct 1 high) resistance is around $1.6340 (Jan 2 highs). Below  $1.5910 support extends to $1.5880 with a break under widens losses to $1.5820 (Sep 24 lows).

YEN

The dollar holds near Asian highs versus the yen. 

USD/JPY retreats from Monday’s highs on Y98.70, currently holding at Y98.40. Initial support comes at Y98.20 (23.6% Fibo of the rally from Oct 7). Below correction may widen to Y97.60 (50%) and Y96.50 (Oct 7 lows). Above Y98.70 resistance is placed at Y99.50 (channel line from May 22).

DATA AHEAD:

At 14:00 GMT and 23:15 GMT Fed's William Dudley and Fed's Richard Fisher speak respectively. 

The last report for Tuesday comes at 23:30 GMT with Australian Aug Westpac Leading Index.

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