After faltering slightly, following news of Moody’s downgrade of Greece’s debt to junk status, the Euro resumed its rally against the Greenback. The pair hit a two week above the 1.23 mark yesterday, as solid European debt auction lessened concerns about the region’s debt crisis. The pair was up at 1.2315, after touching on a high of 1.2349, its strongest price since June 1st.
A steady improvement in the global stock market outlook should continue to boost risk appetite; while at the same time safe haven currencies such as the greenback could come under extensive selling pressure. However, despite the Euro’s rise, Forex traders should remain wary of any unexpected developments that could potentially lead to a reversal in the recent trend.
Support/ Resistance 1.2255/1.2375
On Tuesday, the cable lost ground to trade near 1.4500, after the inflation figure was not as high as initially feared. Yesterday’s CPI report showed that U.K inflation slowed in May for the first time in three months. The key economic figure showed that consumer prices rose 3.4% compared to an expected rise of 3.5% and to a rise of 3.7% in April. However, the late afternoon rally on Wall Street helped the sterling climb to a new session high around 1.4830.
The release of the UK Claimant Count Change this morning, as well comments by the BOE’s governor Mervyn King this evening, could have a significant impact on the British currency. Any indication by King in regards to monetary tightening or any improvement in the numbers for the UK jobs market could have a significant affect on the Pound.
Written by Finexo.com