It was a quiet start to the new week with both major currency pair fluctuating within narrow trading ranges. Generally, the summer months of July and August are traditionally the quietest time of the year in the financial markets. Hence it is not unusual that the market is sluggish. Given these moderate market conditions we advise traders to take profits even at smaller targets as the market may fail to generate major moves and do not invest too much during the summer period.
The euro traded slightly higher against the U.S. dollar after figures showed the German Ifo index fell less than expected in July. However, the euro was not able to break through the 1.10-hurdle and remained in a sideways movement. Once it climbs above 1.10, we expect the 1.1025/30-level to act as a resistance for the currency pair. Today’s price action will hinge on the appetite for dollars as the focus will be on important U.S. data such as Consumer Confidence due for release at 14:00 UTC.
The cable traded sideways between 1.3165 and 1.3080. We will now focus on a break below 1.3070 in order to sell sterling toward lower levels. On the upside gains might be capped at 1.32.
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