European FX Midday recap

13:37CET

These are the items that have been hitting the wires and have had some impact on the markets thus far in European trade:

    * North Korean army: “It is not worth reacting to provocation” from SouthKorea’s exercise – KCNA
    * German November PPI +0.2% m/m, +4.4% y/y, marginally weaker than median forecasts of +0.3%, +4.5% respectively
    * UK interest rates ‘will have to rise sixfold in two years’ – CBI
    * ECB’s Trichet: Believes euro not cause of euro zone crisis
    * Self-righteous Germany must accept a euro-debt union or leave EMU -  AEP at The Telegraph
    * OECD:  Spain could raise taxes further if more consolidation measures needed
    * Aussie leads ‘extreme’ currencies Deutsche says avoid – Bloomberg
    * Mortgage approvals by major UK lenders 45k in November, up from 44k in October.   Amount lent in November 1.3 bln.

EUR/USD sits at 1.3155, exactly where it was when I arrived about 6 1/2  hours ago.   An early rally failed to reach the 1.3187 overnight high, as BIS stepped in and sold around 1.3175.

On a trading note, I issued a buy recommendation on the pair since we have a 1hr buy trigger there.

Sell stops seen through 1.3100.  Buy stops through 1.3210.

USD/JPY marginally easier, down at 83.75 from early 83.90.  Buy orders seen clustered 83.60/70, sell stops through 83.55 and more through 83.40.

Cable has gained marginally, up at 1.5550 from early 1.5510. Indeed sterling hasn’t done too badly in general, EUR/GBP down at .8460 from early .8480.  The CBI raising the spectre of higher UK interest rates will have helped here (see above)

TECHNICALLY SPEAKING: Cable could confirm a bullish divergence on dailies if it rises back again towards 1.57, but with big economic data coming up on Wednesday, I think we will have to wait for that before a confirmation is clear. In any case, I recommend monitoring Cable very closely.

Posted via email from MT4