There was lack of activity on Monday, but the markets are operating at full speed during today’s trading session.
The German ZEW index, which marks the financial climate of the country showed a figure of 31.5 points, much higher than expected, which returned the euro a short-term uptrend.
The single currency lost quickly the level of 1.33, but it will recover soon and look now at the area of 1.3375, strong resistance, which would break the EUR/USD pair directly at 1.34.
The pound also recovers after touching 1.58 and begins to move slowly upward. From the technical point of view it is supported, in a divergence between the momentum indicators and relative strength compared to the stock price. The break of 1.5885 would also trigger an upward movement of the British currency for the next few hours.
Meanwhile, the yen continues to recover positions, after the meeting of the Bank of Japan, which decides the country’s monetary policy. With a planned 13 trillion yen a month in extra securities buying on hold until January 2014, the yen rose and stocks fell. As we said many times, we believe that the USD/JPY pair could return at least to the 85.50 area over the coming days.
In parallel, the European currency lost strength against the yen, and away from the highs it made in the last days. The relative weakness of the pound has made the GBP/JPY pair one of the most volatile market in these times.
Follow the most important data for today: Canada’s retail sales report (8:00 ET) and U.S.’s existing home sales (10:00 ET).
