Major currency pairs continue to trade within their broader consolidation formations for yet another day exactly as we called for at the beginning of the week. The limited amount of significant reports or developments means that traders have little reason to bet heavily in favour of one or the other currency hence the “waiting” game we’re seeing up until now.
Yesterday’s price action was market by Euro’s inconsistency and Cable’s fresh gains on the back of the BoE minutes’ release. Regarding the Single currency, the Euro is trading on the back of the news coming from Greece and their negotiations with their creditors on the terms of the loan agreement. Contradicting statements from Greek and EU officials on whether there is progress in the negotiations or not translate into choppy trading action for the European currency.
The Euro remained between 1.0800 and 1.0700 yesterday showing a lack of commitment to break out of this tight range. As we mentioned above the back and forth in the Greek issue don’t allow any kind of momentum to develop on the Euro but today we have the release of the PMI figures from the Euro-zone that could offer some fresh information to trade upon.
The Cable was more straight-forward on its trading action yesterday when it received considerable support from the release of the Bank of England minutes’ from their last monetary policy meeting. The bullish remarks from the UK policymakers allowed the Cable to move to the upside and print a fresh high at 1.5080 before settling above the 1.5000 level later in the day.
The sentiment on the Cable remains fundamentally bearish on the more medium-term outlook as the market hasn’t yet priced in the upcoming elections risk. However on the more short term horizon we could see further gains from the Cable as the release of the Retail Sales figures today could offer more support to the UK currency.
Finally closing with the FTSE 100 we see that the London index has found some support ahead of the 7,000 points area. This is considered an important support level for the FTSE 100 and while the momentum points downwards it will require a clear break of the 6,980-7,000 points’ support floor to allow the London main index to go lower towards the next area of interest at the 6,900 points.
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