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| Posted: 14 Jul 2009 01:44 AM PDT In the U.S., last week ended with a worse than expected decrease of 6.2 points in the University of Michigan Consumer Sentiment Index for July. The index dropped to 64.6 from a reading of 70.8 in the preceding month finishing a gaining streak of 4 months in a row. Attention is set on today’s U.S. Retail Sales report, as consumer sentiment’s fall may lead to a negative outcome for the retail activity as well. As a result of both a drop of 0.6% in imports and a gain of 1.6% in exports the U.S. International Trade Balance (May) showed that the U.S. international trade deficit contracted 9.8% to its lowest level since November 1999. EUR/USD advanced yesterday peaking at 1.4001 in the afternoon and closing in New York at 1.3990 driven by analysts’ comments on believed surprising gains for Goldman Sachs Group’s second-quarter results to be released today. With risk appetite boosted by these speculations the Yen fell against most of the majors as investors turned to riskier currencies. Sterling fell against the Dollar and the Euro on mixed U.K. Producer Price Index figures and publications about supposed further losses for Lloyds Banking Group on its first-half results report listed to be issued next month. The U.K. PPI input prices gained 1.5% MoM in June (11% YoY), better than the expected 0.8%, while output prices dropped 0.2% MoM when a 0.3% gain was predicted. GBP/USD fell below 1.6050 in Europe morning and changed direction following a rally in stock markets moving towards 1.6250 by the end of the day. Support/Resistance
GBP/USD DAILY
Opening at 1.6124, Sterling dropped towards the 1.6000 level in yesterday’s early hours standing around 1.6030 and rebounded back up to reach 1.6289 before closing at 1.6255. Supports holding around 1.60 and a daily closing above 1.62 send a short-term positive signal preparing the pair for a bullish cycle to test last week’s highs. EUR/CHF DAILY
After trading in a bearish trend since mid-June, EUR/CHF appears to have found support slightly above 1.5100 and had gaining sessions three days in a row. Correction of losses seems to be the current direction with resistance to be found in the 1.5200/30 area. A break of 1.5100 level will focus attention on major supports around 1.5000. Daily Events
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