EUROPEAN session review: Pound rose after M&A news

Data released: 

06:00 GMT Germany Import Price Index (MoM) (Mar) -0.6% -0.2% -0.1% 

06:00 GMT Germany Import Price Index (YoY) (Mar) -3.3% -2.8% -2.7% 

The ‘big news' on Wednesday will come from the Euro Zone with the ECB bank lending survey (lending conditions not getting tighter but not getting easier either) and the Euro Area CPI data. HICP inflation fell from 0.7% to 0.5% last month and a rebound is almost universally expected. A failure to rebound would place huge pressure onthe ECN to ease further very soon. The forecasting community may not be looking for that but the market is very aware of this possibility and we could still see upward pressure on EUR/USD on ‘as expected' data. 

The Ukraine conflict was also still in view, after pro-Russia militants in the country captured Western military observers, accusing them of spying, and paraded them on Sunday in front of media. The U.S. and Group of Seven leaders have said new sanctions are on the way after Russia failed to hold to its side of a deal to de-escalate the crisis in Ukraine. 

EURO 

Expectations that euro zone consumer price inflation could rise when data is released later this week were helping the single currency. Euro zone inflation for April, due on Wednesday, is forecast to rise to 0.8%, year-on-year, from 0.5%, previously. 

EUR/USD holds within the former range with initial resistance comes at $1.3850 (Monday’s high), then - at $1.3900 with a break above targets $1.3965 (Mar 13 high). Below $1.3800 minor support comes at $1.3740 (Apr 8 lows), extending to $1.3670 (Apr 4 lows). 

POUND 

A Pfizer approach to Astra-Zeneca has given GBP/USD a bit of a boost this morning, and a 0.9% increase in Q1 GDP (data tomorrow) would help too. 

GBP/USD rallied to $1.6840, it still may resist the bulls. Further resistance comes at $1.6880 (Nov 15’2009 high). Below $1.6780 support comes at $1.6700 and around Tuesday’s lows on $1.6660 with a break under widens losses to $1.6620 (trend support line from Nov 12’2013). 

YEN 

The yen holds within the range. 

USD/JPY tries to recover, holding above Y102.00. Below support comes at Y101.30 (Apr 10 lows) and Y100.70 (Feb 7 lows). Initial resisatance is around Y102.70. Further resistance comes at Y103.40 and around Y104.00. Stronger one remains at Y104.30/80. 

DATA AHEAD 

Monday, Apr 28, starts at 14:00 GMT, when US report Mar Pending Home Sales.
At 22:45 GMT New Zealand releases Mar Trade Balance with $937M expected after $818M.

Source of information>>

More information>>