The currency market was fairly quiet or rather motionless on Monday. While the euro hovered around the 1.1170-mark, the British pound traded slightly lower against the U.S. dollar. Given the fact that the market is short the pound on speculation the Bank of England will ease monetary policy on Thursday, the risk is clearly to the downside. We will pay attention to a break of 1.3150 and 1.3060 in order to sell sterling towards lower levels. Upward movements however, could be limited to 1.3340 and 1.3440.
The only piece of second-tier economic data will be the U.K. Construction PMI scheduled for release at 8:30 UTC. From the U.S. we only have Personal Income and Spending figures scheduled for release at 12:30 UTC alongside the PCE report. These reports are not expected to have a significant impact on the currencies.
As there will be no market movers today, the consolidation phase may continue to dominate the markets. We therefore do not expect any major movements and recommend taking smaller profits if there are any.
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