It has been a quiet start on Monday with the euro being stuck to a 40-pips range and the cable not showing much effort to break below its recent uptrend channel. The British pound found some halt around the lower barrier of its latest upward trend-channel at 1.2465 but it was unable to hold onto that high level and fell towards 1.24 this morning. If the pound breaks also below 1.2390, we expect further losses towards 1.2330 and 1.23. As noted in yesterday’s analysis, the cable will need to break the 1.26-level significantly in order to invigorate fresh bullish momentum.
Sterling traders will watch the U.K. Construction PMI, scheduled for release at 8:30 UTC. This report could have a short-lived impact on the pound.
The euro remained stuck between 1.0680 and 1.0640. We may see some accelerated momentum today but euro traders are unlikely to get any new insights into the ECB’s thinking from ECB president Mario Draghi who is scheduled to speak at 13:30 UTC in Frankfurt. If he does not refer to monetary policy, his speech will be a nonevent for traders. From a technical perspective, we expect the EUR/USD to trade between 1.06 and 1.07 in short-term time frames.
From the U.S. we have Durable Goods Orders due for release at 14:00 UTC but this report is only of secondary importance.
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