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Europe –The release of May’s French Current Account Balance will probably post a worsening shape as the previously strong Euro has wore down the export division of many EZ countries. So, traders will probably center their attention somewhere else: The European balancing act of managing growth together with calming inflation will be put to the final test as CPI data for Italy, France, and Germany and on the whole Euro Zone will be released together with the ZEW series of sentiment surveys. Weak CPI data will put great selling pressure on the Euro as this would more harden the ECB’s neutral stance through the year’s end. The ZEW release will probably release further decline in the EZ’s main economy as the overflow from the US becomes clearer with the passage of time.
Dollar vs. the Majors
Last week saw the dollar sell off across the range as an unfilled US calendar saw traders kept their eyes on stock market chaos fueled by bad act of government-backed mortgage lenders Fannie Mae and Freddie Mac. Reassuring comments from the US Federal Reserve and the Treasury department have distressed the down move by the beginning of this week. With most major pairs positioned at critical support/resistance levels, the dollar may be providing a broad-based counterstrike.
EUR/USD
Strategy: Flat, waiting for confirmation
GBP/USD
Strategy: Flat, waiting for confirmation
USD/JPY
Strategy: Bullish against 105.15, Targeting 107.42
USD/CHF
Strategy: Bullish against 1.0100, Targeting 1.0240
USD/CAD
Strategy: Flat, waiting for confirmation
AUD/USD
Strategy: Bullish against 0.9720, Target TBD
13:22
Posted on Jul-15-2008
