EUROPEAN session review: market stays calm

Data released: 

09:00 GMT EMU Industrial Production s.a. (MoM) (Aug) 1.0% 0.8% -1.0% 

09:00 GMT EMU Industrial Production w.d.a. (YoY) (Aug) -2.1% -2.4% -1.9%

U.S. Senate Majority Leader Harry Reid said yesterday that he had a “productive conversation” with Minority Leader Mitch McConnell without reaching a conclusion on a plan to send to the chamber for a vote. Senate Republicans have blocked a Democratic plan to push the next debt-limit fight into 2015 and Senate Democrats rejected a proposal from Republican Senator Susan Collins of Maine. 

EURO 

The better-than-expected EMU’s industrial production data gave the euro an ephemeral support, expanding at a monthly pace of 1.0% and contracting 2.1% over the last twelve month, vs. estimates at 0.8% and -2.4%, respectively. 

ECB Governing Council member and Malta's central bank head Josef Bonnici said on Monday that the ECB is prepared to introduce the negative deposit rate, although such a move could have adverse implications. 

EUR/USD holds above $1.3500 initial resistance is around yesterday’s high on $1.3560, above - near $1.3600 (Oct 8 highs). Minor support somes at recent lows on $1.3480 with a break under widens losses to $1.3400.

POUND 

The pound holds within the narrow range in absence of key data. 

GBP/USD eased after the test of $1.6000 and recovered again. 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 yen rose for the first time in five days against the dollar as U.S. lawmakers struggled to reach an accord on raising the nation’s debt limit and restoring government operations, spurring demand for safer assets. 

USD/JPY retreats from Friday’s highs on Y98.50 with initial support comes at Y98.00 (23.6% Fibo of the rally from Monday’s lows). Below correction may widen to Y97.50 (50%) and Y96.50 (Monday’s lows). Above Y98.50 resistance is placed at Y99.00/10 (Aug 23 and Sep 26 highs).

Source of information>>

More information>>