Increased Interest Rates Await the Euro Zone |
Follow through was seen into today’s European trading session with the euro and other higher yielding currencies receiving a bid. An additional Greek vote on austerity measures will come today though this should be more of pomp and circumstance when compared to yesterday’s drama. Technicals hint at a period of consolidation versus the dollar but with euro strength brings opportunities for traders to enter into the EUR/CHF at better levels.
Today’s Economic Data Releases:
EUR – CPI Flash Estimate y/y – 09:00 GMT
Expectations: 2.8%. Previous: 2.7%.
Yesterday and today Trichet spoke of the need for “strong vigilance”, another sign of the ECB’s intention to lift interest rates at its next meeting. Euro zone inflation is expected to remain at higher levels for now which could be supportive of further gains. This may offer traders an opportunity to enter into the EUR/CHF at better levels as the pair comes off of its all-time low. Resistance is found at 1.2150.
USD – Unemployment Claims – 12:30 GMT
Expectations: 419K. Previous: 429K.
Weak US unemployment numbers would likely support dollar bids which would come just in time as the EUR/USD is reaching the top of the current triangular consolidation pattern on the daily chart at 1.4540. A pause here would likely keep the pair range bound with a negative technical bias while the market awaits further developments in the Greek story.
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