FX Markets Calm Before an Event Filled Week

News and Events: There is a definitely a calm before the storm feeling in the FX markets today. Asian equity markets were mixed and Europe has had a confusing start.  While the EU officials were publicly parading the impending solution, the WSJ highlighted the EU inflation story stating ‘Trichet Warns Price Pressure Is Increasing’ giving ECB exit theorists further reason to believe that higher rates are closer then the market has currently priced in.  The BoE Governor King has made it clear that MPC policy will not involve fine tuning, so strong growth could easily lead to a shift in language and the markets will quickly begin pricing in a string of rate hikes. As for today, we suspect that risk correlated trades should firm as a lack of economic data will have traders focused on the impending EU agreement. Read Today's Key Issues and The Risk Today

Resistance and Support: EURUSD GBPUSD USDJPY USDCHF 1.3825 1.6185 83.70 1.0065 1.3785 1.6060 83.50 0.9850 1.3635 1.6020 83.12 0.9784 1.3574 1.5960 82.79 0.9607 1.3397 1.5835 81.70 0.9530 1.3245 1.5810 80.95 0.9500 1.3145 1.5785 79.75 0.9425 S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot