Illiquid Markets Keep the Majors in Tight Ranges

Daily Forex Fundamentals | Written by Saxo Bank | Aug 25 08 13:04 GMT |

With 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. Note: the support/resistance levels used in the matrix's of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur. EURUSD Resist. 1.5121 1.4970 1.4881 1.4764 1.4730 1.4668 1.4517 Support Quoted: 25 Aug 08 11:28 GMT GBPUSD Resist. 1.9188 1.8898 1.8712 1.8500 1.8423 1.8319 1.8029 Support Quoted: 25 Aug 08 11:28 GMT USDJPY Resist. 113.17 111.34 110.70 109.91 108.87 107.68 105.85 Support Quoted: 25 Aug 08 11:28 GMT EURJPY Resist. 165.82 164.13 163.47 162.27 161.79 160.77 159.08 Support Quoted: 25 Aug 08 11:28 GMT USDCAD Resist. 1.0596 1.0528 1.0498 1.0458 1.0429 1.0391 1.0322 Support Quoted: 25 Aug 08 11:28 GMT USDCHF Resist. 1.1236 1.1091 1.1037 1.0985 1.0892 1.0800 1.0654 Support Quoted: 25 Aug 08 11:28 GMT AUDUSD Resist. 0.9041 0.8875 0.8768 0.8673 0.8601 0.8541 0.8375 Support Quoted: 25 Aug 08 11:28 GMT NZDUSD Resist. 0.7407 0.7267 0.7176 0.7083 0.7036 0.6987 0.6847 Support Quoted: 25 Aug 08 11:28 GMT Analysis Disclosure & 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. 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