Forex News

The role of the ECB in the ongoing eurozone and banking crisis has been significantly understated. In parallel with the IMF’s and EU’s multi-billion euro interventions, the ECB has engaged in its own bail-out operation, providing cheap credit to insolvent banks and propping up struggling eurozone governments, despite this being against its own rules.

On 18th March 2011 the G7 central banks intervened in an effort to dampen the strength of the yen. It is becoming clear now that the recovery in USD-JPY that was ensued was not sustainable.

EUR/USD – Could extend gains this week, but likely not breaking above 1.5145 EUR/GBP – Holds a >0.9043 test likely

Developed stock markets are increasingly vulnerable. In the USA, volume has been skewed to down issues since March and an internal bear market (when more than 50% of stocks in the NYSE trade below their 200 day moving average) is close to being confirmed.

EUR USD (1.4600) Christian Noyer issued the all-clear signal for the eurozone from Helsinki yesterday. His upbeat comments echo those of Ollie Rehn who spoke before the Council on Foreign Relations last week.

EUR remains bid despite Juncker seeing it as overvalued; further volatility, upside to come RBA stands pat; Statement suggests may be backtracking on inflation concerns

Today’s highlights: EUR/USD: Resilient digestion above former 61.8% retrace resistance (1.4572) still aims at 1.4735/54 this week, with the June threat to the 1.4944 cycle peak

Another 4 day week…..? Yet again, we have an extremely slow Monday with ranges tight, and flows light across the board. Clearly “Weekend Gamma” remains in demand, and understandably so. However, it continues to make for a complete washout on the Monday.

News CZ: Neutral – Govt auctions CZK 6.196bn VAR/16 CZGB, bid/cover ratio – 2.51 / Govt approves new pension reform legislation (p2) TK: Dovish – CBT leaves both policy Rate and RRR unchanged (p2)

Copper – a second bear flag to go Nickel – heading next for 20,450 Alu – still on the bullish side Zinc – topside spike points down Steel billets – false upside break

Overnight equity markets Nikkei          +0.64%          9’440.86 S&P500          -1.08%          1’286.17 Dow             -0.50%          12’089.96 Nasdaq          -1.11%          2’702.56