Greek polls give the euro a lift

Morning Comment   

Current mid-market inter-bank spot rates (as at 07:45 GMT) 

Major sterling  

Major US$  

Sterling emigrate  

Other sterling  

Euro crosses 

Data / Events due today 

Fundamental 

A positive start for financial markets on Friday morning as European equities staged a recovery while peripheral bond yields also narrowed. In response, the euro posted early gains as investors trimmed short positions. Also helping risk sentiment was a rumour of a meeting in Germany with talk of treating Greece in a similar way to that of East German integration. 

In the States, there was a surprise upward revision to the University of Michigan consumer sentiment survey for May which makes a ninth consecutive increase. 

The euro has been given a boost to start the week with news that Greek polls suggest pro bailout parties are back in the lead and talk of a distressed bank rescue fund being created. 

With the US on holiday and no data releases scheduled, we look set for a quiet start to the week. We have German inflation and US consumer confidence tomorrow, US GDP on Thursday then US labour data on Friday which is the pick of the week’s releases. 

Technical  

£-usd 

The pound lost ground for a fourth consecutive week, the first time this has happened since last August/September. Friday saw a marginal dip below 1.5645 support but the move was quickly reversed and we closed the day almost unchanged. The early week break back above Friday’s 1.5700 high added top the 1.5645 support and signs of a turn in daily momentum gives sterling a chance to recover with 1.5735 the initial hurdle to clear. Beyond here, we would look towards 1.5800/05, 1.5845/50 and 1.5885/90. Support today at 1.5645/30 then 1.5605/00, 1.5550 and 1.5490. 

£-eur  

A strong week for the pound as it recovered from an early week downside test to 1.2350 which filled a two week old gap to close the week around 1 1/3^rd cents. This produced the highest weekly close (1.2512) since early November 2008 but failed to tackle the 1.2580 high from the previous week. The new week has begun with sterling on the back foot and bears will be eying 1.2435/30 initially. Below here, 1.2405, 1.2385 and 1.2350/40 come into play. Resistance today at 1.2490/1.2510, 1.2530 and 1.2575/80. 

Analysis of further currency pairs, forward contract pricing, and information on limit or stop loss orders is available at any time on request.                                          

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