Monday we could barely muster a 20 pip pullback in a EUR/USD rally from hell. Low and behold, it is turnaround Tuesday and now we can barely bounce.
Sterling strength has been a major factor as hopes for a house price bottom, signs of life in the banking sector and anecdotal evidence of strong Easter retail sales gave the pound a turbo-charged lift. Extremely poor GDP data from Singapore has cast doubt over the notion of Asia leading the developed world out of recession. GDP fell 19.7% annualized in Q1. Singapore eased monetary policy by “recentering” (devaluing) the Singapore dollar modestly.
Retail sales will be the main focus from the US this morning. A rise of 0.3% is expected.
EUR/USD finds support at 1.3258/60, the 50% retracement of yesterday’s 1.3125/1.3391 rally. Stops are perched at 1.3245.
