Trading is once again biased to the dollar after the downside move seen yesterday. Sterling surrendered yesterday's gains and the euro lost some of them, while the yen is trading within a very tight range and still unable to compensate Monday's losses. The mixed sentiment and jitters are still evident with the pending status seen awaiting the final vote from the Greek parliament on the austerity plan that will determine the outlook for the crisis and for markets in the coming period.
The German data today showed a rise in consumer confidence according to the July Gfk survey. The data remains weak amid the prevailing jitters over the outlook for the recovery and debt crisis that continues to worsen in the area. The euro is still pressured by the ongoing debate in the Greek parliament over the austerity package which is pending the vote sometime tomorrow, especially as the tension is on the rise with the general 48-hour strike pressuring the parliament to block the measures, which could prevent the loans for Greece and pressure a default within weeks!
The EUR/USD declined after reaching 1.4329 to reach the low of 1.4235. Technically, areas of 1.4325 is the MA 50 over daily basis and trading below this level keeps the downside bias for the pair intact for the rest of the day though stability below 1.4205 is essential to confirm the downside move; without existing the range of 1.4205 and 1.4325 trading will remain mixed for the pair.
The failure of sterling to continue the upside move was further restricted by the dollar's strength. At the same time, the confirmed sluggish growth in the first quarter also limited the pair's gains and pressured the royal pound. The pair declined from 1.5999 reaching the low of 1.5909 and trading below 1.6000-60 keeps the downside bias seen for the pair.
Tight ranged trading and marginally neutral is seen for the USD/JPY despite the yen's attempts to move higher. The Japanese yen's gains ended after reaching 80.70 areas and then the pair returned higher to the high of 80.91. The trading range is very tight and marginally below 80.95 critical resistance and accordingly might help the yen gain enough momentum to take the pair again to the psychological 80 barrier, while breaching above 80.95 will carry the pair into a clear upside wave.