Forex News | Currency News by Forexlive

My long position from yesterday afternoon looked oh so promising for a short while but the pair has opened with a ‘soggy’ feel in early Asia, drifting almost 20 pips lower in relatively quiet trade. The range parameters at 80.70/82.25 are well established and perhaps we are due for more extended periods of range trading as neither side seems able to grab the upper hand.

As Gerry reported yesterday during the London session, there was a rumour doing the rounds that todays Chinese PMI figure will be 52.0, which is slightly above expectations. Recent leaks have proven to be right on the money, so lets see what today’s bring.

–House Ways and Means Chief Says His Debt Hike Bill ‘Must Fail’
–Rep Camp: Debt Hike Must Be Linked To Spending Cuts, Budget Reforms
–House Minority Whip Hoyer: House GOP Designed Debt Hike Vote To Fail
–Rep. Hoyer: House GOP Debt Bill Is ‘Not An Honest Proposal’

By John Shaw

WASHINGTON (MNI) – As expected, the House voted overwhelmingly
Tuesday evening to reject a bill that would have increased the statutory
debt ceiling by $2.4 trillion without any conditions placed on it.

The House voted to 97 to 318 for the debt increase bill, with seven
members voting present. No Republican voted for the bill. All 97 votes
for the bill came from Democrats.

The House debt-limit vote was held under a special procedure that
prevented any amendments and also required the measure to get a
two-thirds majority to pass. It fell more than 100 votes short of even a
simple majority

Republican leaders said the purpose of the vote was to show the
White House and congressional Democrats that there is no support for a
clean debt ceiling increase that is not coupled with deficit reduction
measures.

During the debate on the House floor, Ways and Means Committee
Chairman Dave Camp said the bill that he proposed “will and must fail.”

Camp said the purpose of the vote was to show that there is little
support in the House for a clean debt ceiling increase bill. He said
that more than 100 House Democrats sent a letter requesting a clean debt
ceiling increase, but balked when Republicans offered them this.

Camp said Republicans will demand that any debt ceiling increase
be coupled with “substantial spending cuts and real budgetary reforms.”

Camp said defeat of the clean debt ceiling bill would “send
this strong signal” that any debt ceiling increase must be coupled with
a strong deficit reduction package.

House Democrats pounced on Republicans for staging a debt ceiling
increase bill that was designed to fail.

House Minority Leader Nancy Pelosi said the debt hike vote was
conceived by Republicans who “want to change the subject from Medicare.”

She urged a “big, strong vote against” the House GOP debt ceiling
bill.

“This is not an honest proposal,” said House Minority Whip Steny
Hoyer, charging that House Republicans were playing political games.

“It’s a good demagogic vote,” he said.

Hoyer said Congress and the White House should focus on negotiating
a deficit reduction package that could be linked to a debt hike vote
later in the summer.

He said the budget talks led by Vice President Biden are working
hard to secure a deficit reduction package that can be linked to debt
ceiling legislation.

The U.S. has already reached its $14.29 trillion debt ceiling.
Treasury Secretary Tim Geithner has said that Congress must pass
legislation increasing the debt ceiling by August 2.

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$]

That is slightly below expectations and will offer some hope that regional inflationary pressures are easing slightly.

Thanks Annie for the link to the Irish Indo.

Asia has been on a stop-loss hunting binge in EUR/USD in recent sessions. Once again we have posted new highs early in the Asian session but there are no reports today of any major stops on the topside, as there were yesterday and last Friday.

Sell orders are reportedly solid 1.4455/70.

Today’s GDP numbers will show a contraction in the Australian economy for the first 3 months of the year but remember that the Queensland floods caused temporary havoc and much if not all of the slowdown can be blamed on that.

The AUD is starting to show signs of weakness, especially on the crosses; AUD/NZD has broken sharply lower in recent weeks forcing the ‘almost-always-long’ hedge fund community to bail out and now EUR/AUD is showing signs that it too wants to break higher. China was seen selling rallies overnight above 1.0700 so any bullish headway for the AUD is likely to involve a lot of hard work.

On the bullish side, Middle East Sovereigns and ACBs usually pop up when any big dips occur so range trading is still favoured.

I think its dangerous to be getting overly bearish EUR now that the main EUR crosses are threatening a turn but EUR/USD does feel a bit overstretched at 1.4400, for the moment at least. Last week we were struggling to break back above 1.4100 so I don’t think we should be getting overly bullish at these lofty levels. I think its possible we see a dip back onto the 1.42 handle before the market decides on it’s next major move.

USD/CHF is trading near it’s NY highs at .8550 and there were reports of plentiful trailing stops above .8555 yesterday during early European trade (which I’m presuming are still live)

Just brilliant Jamie

Australian GDP this morning and the market is now gearing itself for a poor number after yesterday’s data and weekend comments from the Treasurer. China is selling rallies in AUD/USD and Middle East Sovereigns are buying big dips; sounds like a recipe for medium term range trading.

The EUR has made big moves on the crosses with EUR/JPY, EUR/GBP and EUR/AUD all threatening a return to recent bull trends and even the ultra-bear trend in EUR/CHF is showing signs of tiredness.

Good luck today

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