Increased volatility and lack of direction remained as the main market theme in the major money markets yesterday with mixed price action in the instruments we’re monitoring in our daily report. Traders continue to monitor the situation in Greece awaiting approval of the deal between the Greek government, the EU and the IMF while at the same time they responded to Fed boss Yellen’s comments over the outlook of the US economy.
As a result both the Euro and the Cable were rather volatile and indecisive in their price action over the past 24 hours. The Euro started the day on a bearish foot breaking below the 1.0900 barrier and it seemed that the decline would continue, however the Single currency found support ahead of the important 1.0850 area that we mentioned in our report yesterday.
The Euro managed to end the day floating just below the 1.0900 area signaling that the decline might have been overextended and some breathing room is needed. We would have to wait for some kind of positive spark to trigger a correction in the Euro but at this time we’re hesitant to suggest that further losses are to be expected in the short-term.
Quite similar to the Euro in terms of volatility and uncertain price action the Cable spend the last day trading either side of the 1.5600 level. Early in the morning the Pound dropped against the Dollar driving the pair below yesterday’s lows but even though it seemed that the currency would reverse its recent uptrend and move towards lower levels strong support emerged and pushed it higher again.
This morning the Cable is trading near yesterday morning’s levels again having completed a V-shape pattern over the past 24 hours revealing that there is important support behind the currency at this time. A complete reversal of the previous uptrend would need strong backing behind it as the Pound proves to be in demand at this point. We expect limited price action during today’s session as there are no UK-related news and traders would probably not commit ahead of the weekend.
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