Vekslers Forex Blog

FX consolidation in thin mkts; EURGBP drives EURUSD lower on BOE

Ken VekslerKen Veksler , Director, Accumen Management
United Kingdom, 08 August 2012 at 11:37 GMT+0
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Consolidation seemingly remains the name of the game today.

The market is clearly lacking any fresh inputs and as noted yesterday in the absence of any such fresh news and with most out on holiday, volumes and liquidity remain thin. No fresh flows are coming into the market at present, and save for the BoE quarterly inflation report this morning, there has been little of any real merit to mention.

Mervyn King

On the topic of Mervyn, he ever so clearly made it known that a rate cut is currently not on the cards as well as staunchly defending the administration of the UK economy by him to date. The net effect has seen a dribble lower in EURUSD driven in large part by the EURGBP, which had a natural offered tone on the back of Merv. Cable rallied (understandably) as the comments were seen to be more hawkish than expected. The above picture is also part of a broader consolidation currently at play in the market and the fireworks (should there be any) are likely to be seen into either tomorrow afternoon or even the Friday position squeeze.

On the topic of levels, well not a great deal has changed since yesterday, and the much touted EURUSD option barrier at 1.2450 has thus far held any further upside.

The sun is shining (attempting to break through cloud cover) and the market is quiet. Your scribe hasn’t got a great deal to add at this point and awaits fresh inputs.

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