The euro was stable for third straight session today, immediately supported by the 50 day moving average after selling off substantially on Tuesday. Rangebound trading has dominated since Wednesday with the single currency currently trading around 1.1200 against the USD as investors struggle with direction. We anticipate the euro to trade with more confidence next week but will quietly see out the week as the current confusion on whether or not a deal will present itself this weekend has investors struggling with direction. The dollar index is trading with similar sentiment today having found firming support around 95.00 on Wednesday. Currently the index is trading around 95.200 against a basket of major currencies and with the University of Michigan sentiment index the only prominent data release for the day we expect rangebound trading between 95.00 and the 50 day MA towards 94.476 throughout the remainder of the session.
After some knee jerk profit taking earlier this week eurozone equity markets are on track to end the week on a more positive note as benchmark indices across the region pushed tentatively higher. While talks between Greece and its creditors ground to a halt this week as proposal after proposal was tabled and then subsequently shelved, investors are hopeful that negotiations over the weekend will finally bring a conclusion to talks which have been dragging on for months now. All eyes will be firmly fixed on the eurozone over the weekend and on Monday with the modest uptick in risk assets indicating investors are hopeful for a deal. However, the “now or never” rhetoric has been played out a number of times and we’ve seen the can kicked further down the road at each impasse…hopefully this weekend will be different.