Early price action goes with the familiar theme

Early price action suggests some consolidation across the board, but we are expecting the session to liven up through the day. For now, the key majors are trading at mid range levels, so we may need to see some limits tested before the day’s direction is ‘decided. EUR/USD is still running into sellers on the upside, but after a number of tests on the mid 1.0500’s, the upper limits could be a little vulnerable. Cable is back off the 1.2500 level and remains soft in prospect of some fresh EUR/GBP demand. Over the last few days, .8450-70 has seen strong bids holding up the pair, and while the longer term picture and EU wide political risks point to further downside, the short squeeze risk – as in EUR/USD – is stronger at the present time. The cross rate flow is also impacting on AUD and NZD trade; AUD/NZD is now in the mid 1.0400’s. NZD/USD looks more comfortable in the mid .7100’s, while sellers in AUD/USD into .7500’s contain for now.