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Trading Stays Light Between ECB Rate Cut and US Unemployment

Trading Stays Light Between ECB Rate Cut and US Unemployment

Benjamin Spier, Technical Strategist

Following a day of selling-off the major European currencies on the minimum expected ECB monetary action, Euro and Sterling have been trading in a tight range during today’s session. GBPUSD maintained a small correction from yesterday’s low, and is currently closer to 1.5550, after dropping close to 1.5500. Euro maintained tight trading around 1.2380 throughout the European session.

Bonds have continued the risk-off attitude, Spanish 10-year bond yields reached 7% during the European session.

The Swiss annual inflation rate was reported to be -1.1% during the month of June, lower than the expected -1.0% rate. The news was accompanied by a temporary dip in USDCHF trading, however it is unclear if this was caused by the stronger than expected deflation or just a price correction that was also mirrored in Sterling and Euro trading.

In other news, UK factory output prices also fell -0.4% during the month of June, which was more than expected. German industrial production grew an unexpected 1.6% in May, following a month of 2.2% drop in output. ECB’s Asmussen also spoke today about the uncertainties over longer-term growth. However, none of these news items managed to move the markets in a noticeable way.

Traders should watch the US nonfarm payroll change and unemployment rate, which is set to be released at 12:30 GMT.

GBDUSD 15-minute: July 6, 2012

Trading_Stays_Light_Between_ECB_Rate_Cut_and_US_Unemployment__body_gbpusd.png, Trading Stays Light Between ECB Rate Cut and US Unemployment

--- Written by Benjamin Spier, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.