EUR/USD – Upside Risk. EUR reversed initial losses to close firmer above
1.11-handle on USD softness following dovish FOMC minutes and softer
than expected US CPI inflation. Expectation of US possibly delaying rate
hike suggest that monetary policy divergence between US and EU could
take a breather. Low-yielding currencies (EUR, CHF, JPY) were broadly
firmer against the USD overnight. EUR was last at 1.1140 levels, higher
than overnight close. On Greek’s 3rd bailout package, German parliament
has voted in approval. Day ahead, 4-hourly momentum and stochastics
are indicating a mild bullish bias. Next resistance at 1.1230 (23.6% fibo of
Mar low to May high) before 1.1340 (200 DMA). Support at 1.1050 levels.
Week remaining brings GE GfK Consumer Confidence (Sep); EC Consumer
Confidence (Aug A) on Fri.
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