The main currency pair remains under pressure and there are no fundamental triggers seen at the moment. There are not so many volunteers to take the risk before the ECB meeting.
Yesterday, the Euro was under sales pressure, but their volumes were average. Investors have started to receive the key information for understanding perspectives of the currency. Meanwhile it is not too encouraging. The meaning of macro publications is exacerbated by approach of June meeting of the European CB.
Recently, published statistics has shown that the Consumer Price Index in Europe has dropped to 0.5% against April figure of 0.7% (YY). There were supposed to be no changes since former level. It turns out that May decline of the Euro passed by inflation, because the fall was marked in the sub index CPI Core, which doesn’t take to account volatile categories. It means that the thing is not just that the Euro is too expensive. It suggests how much the economy needs stimulating expansion.
It is not ruled out that tomorrow the rate of the ECB will be downgraded, and the Euro will go testing support.
Issued reports on the revised GDP didn’t add anything new in the general picture. Economy growth yearly constituted the same 0.9%. There were almost no reactions of the market to that piece of information.
Now without a doubt all attention is drawn to the ECB press conference.
As has been expected the Euro has entered a channel within which it is consolidating. The fluctuations are quite even and identical to one another, what is quite remarkable. So general bias remains bearish, and the trend is expected to recur after the end of consolidation.
The pair has pulled back from the above resistance. Still the retracement is not too strong and it is too early to talk about any more or less significant trend reversal. The pair might try to test the height again, but the forecast in the near term is bearish anyway.
The Pound is within the range between two boundaries. Support on the downside is quite strong and essential for the Pound, as it can help it to withstand the downward pressure. A break below the line will be a signal of the downward trend exacerbation.
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