EUR USD (1.4405) The trading range in the EUR/USD seems to be bound by the Greek debt crisis on one end and by the US debt ceiling crisis on the other. The separate issues likely prevent traders from choosing a trend, and the Market Bias Index confirms this indecision, but they are nevertheless prepared to trade off the vicissitudes of either economy. The OECD’s composite leading indicators yesterday show that the US economic expansion is moderating but still stable, while the eurozone is showing a mild loss in growth momentum. The Business Roundtable published the results of its quarterly survey of US business leaders, which revealed that chief executives at the country’s largest companies expect to increase hiring and capital spending over the next six months. However, according to the National Federation of Independent Business, the mood amongst small company owners points rather towards recession. Almost twothirds of those respondents said that now is not the right time to expand; the NFIB stated that two years into the recovery only big banks and big manufacturers are winning. Furthermore, one fund manager survey suggested that investors are reducing their exposure to risk and rotating into the defensive sectors as well as into cash.
The euro will not regain stabilisation until it surpasses the 1.4565 resistance level, and it would come under greater selling pressure if the support at 1.4235 should fail.
Market Bias Index
If the perceived overvaluation of the Swiss franc diminishes by as much today as it did the previous day, it would be effectively bias-free by tomorrow morning.
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Deutsche Bank
Fixed Income Research – Global