The first session of the week was quiet and price action was rather smooth across most of the instruments we monitor in our daily report. There has been little in terms of fresh news over the weekend and with the economic calendar empty of any important report traders didn’t get to do much trading yesterday.
However as the week progresses we will have more opportunities to trade on as there will be more important news from most fronts. Traders’ focus remains on the US Dollar and the British Pound as the Euro has taken a back seat for the time being as there are hardly any fresh developments at this time. The Dollar has been on focus throughout the previous week and that resulted in strong gains across the board but this week might be a bit lighter for the US currency.
On the contrary though the Pound will remain at forefront the following days leading up to the release of the BoE minutes from the last Monetary Policy Committee meeting that is expected to reveal policymakers’ bias over the domestic economy. The Pound has been showing remarkable resilience against the rising US Dollar over the past week as it remained trading around the 1.5600 area.
The Cable has stalled its previous rally around the aforementioned area and has formed a sideways consolidation pattern trading either side of the 1.5600 level. Several attempts have been made to drive the pair lower but one after another have failed revealing that there is considerable support behind the UK currency. The upcoming release of the meeting’s minutes is expected to reveal renewed bullishness among the members of the MPC and that would be enough to revive the rally.
The Euro, on the other hand, remained under pressure and even though it didn’t print any new lows the currency spent the day trading between 1.0820 and 1.0870. The sentiment remains bearish and even though Greece managed to fulfill its payment to the ECB yesterday traders remain skeptical over the course of the negotiations that are to come.
They realize that even if a deal is struck and Greece gets funding for the next 3 years any plan that will be agreed on will hardly be sustainable. As such we expect the Euro to remain bearish and with little on the calendar today we expect limited price action over the next 24 hours.
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