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Illiquid Markets Keep the Majors in Tight Ranges
By: Saxo Bank - 25-08-2008
0votesWith London closed for trading and no significant economic releases on the schedule today, illiquid markets and range trading are set to prevail in the FX markets.
MAJOR HEADLINES – PREVIOUS SESSION- EC Current Account (Jun) out at -8.2B vs. -7.3B prior.
- UK GDP QoQ/YoY (2Q P) out at 0.0%/1.4% vs. 0.1%/1.5% expected.
- UK Private Consumption (2Q P) out at -0.1% vs. 0.5% expected.
- UK Exports (2Q P) out at -0.5% vs. 0.4% expected.
- UK Import (2Q P) out at -1.4% vs. -0.3% expected.
- EC Industrial New Orders MoM (Jun) out at -0.3% vs. -1.1% expected.
- EC Industrial New Orders YoY (Jun) out at -7.4% vs. -6.3% expected.
- NZ Food Prices MoM (Jul) out at 0.6% vs. 1.3% prior
THEMES TO WATCH – UPCOMING SESSION
Key Risk Events (All times in GMT)- Hungarian Rate decision with expectations pointing to unchanged rates at 8.50% (12.00)
- US July Existing Home Sales (14.00)
Market Comments
With UK markets closed due to a bank holiday, and with the US July Existing Home Sales the only key market data to be released, the currency markets are taking virtually a day off with the ranges in the major pairs holding firmly with EURUSD sluggishly swinging within the 1.4695-1.48 band, with the USD seemingly unable to add to last Friday's 1.5 figure advance against the euro. Advances in the Asian equities have also failed to excite the European session, with major equity indexes broadly unchanged.
While last week's poor 2Q GDP release from UK along with the disappointing July Retail Sales have kept sterling on the offer through the of Friday, with cable finally pushing through major stops at the break of 1.85, the subsequent technical hammer formation for the day with rejection of further selling just above 1.84 indicate that the markets aren't quite ready to write sterling off altogether quite yet.
A very similar picture prevails prevail in EURGBP, where a daily close above 0.80 now looks to be a key for further upside gains to be sustained.
Next Analysis: Fundamentals continue to be the main determinant on trend settingContent Provided by:
Saxo Bank
Company Description: Founded in 1992, Saxo Bank officially attained European bank status in June 2001 and has rapidly risen to become a strong presence in online trading over the Internet. Saxo Bank is based in Copenhagen, Denmark and was founded by joint CEOs Lars Christensen and Kim Fournais.
DISCLAIMER:
Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.
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