Currency market. EUROPEAN session review: BoE said about UK economy growth

Bank of England’s representatives had their speechs today. However we didn’t see any significant reaction from the pound, because BoE officials said nothing new. BOE, Bean noted 'perfectly possible' that when unemployment hits 7%, MPC may set a new target of 6.5% It comensated possible positive effect from Carney’s “U.K. economy is picking up sharply”. 

EURO 

ECB’s Coeure earlier noted that negative rates are a possibility: 

-have been discussed; 

-only one of several tools available; 

-we don’t see disinflation worsening if growth weakens. 

EUR/USD holds at $1.3540 with initial resistance comes at $1.3580 (Nov 19 highs). Above $1.3600 resistance placed at $1.3620 (61.8% Fibo of the $1.3830 - $1.3300 decline). Now support comes at $1.3480 (50% Fibo of Thursday’s lows), $1.3400/90 (Nov 13 lows) and $1.3300/90 (Nov 7 lows). 

POUND 

In UK the focus is on the report that tomorrow may show the U.K. economy expanded for a third quarter in the three months through September. Britain’s gross domestic product rose 0.8% in the third quarter after growing 0.7% in the previous three months. That would confirm a report released on Oct. 25. 

GBP/USD stays near $1.6160, off Friday’ s high on $1.6240 (initial resistance). Initial support is around $1.6150 (channel line from Nov 11), then - at $1.6070 (Nov 21 lows) and $1.5900/90 (Nov 14 lows). 

YEN 

The BOJ MPC minutes this morning showed some board members concerned about downside risks to output and inflation readings and this should continue to keep the JPY on the defensive. 

USD/JPY holds below Monday’s high on Y101.90. Above resistance comes at Y102.20 (channel resistance line from Nov 7), extending to Y102.40 (May 28 high). Further resistance comes at Y103.70 (May 22 highs). Initial support comes at Y101.30 (Thursday’s highs), then - at channel line on Y100.70. 

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