Session recap – Risk aversion ebbing, key levels held

By FXstreet.com | July 18, 2014 AAA

FXStreet (Guatemala) - The end of the week has seen key levels under attack with the risk aversion conditions in play while investors are concerned over the tighter sanctions that Europe might impose over Russia.

GBP/USD has managed to reclaim some dignity in an attempt on the 1.71 handle but has fallen shy of that territory and is closing below the pivot at the end of a down week for the pair. The nail in the coffin was the rumors on Carney offering a dovish outlook to the media, and this triggered panic selling triggering stop losses down to key supporting grounds.

USD/JPY has been one for a pot of tea and a comfortable foot-rest that stayed within a tight range. Although the risk aversion has ebbed and there appears to be a bullish bias towards the greenback, MACD and RSI are giving signals that there is still ample room for downside should support give way.

EUR/USD dropped to a half year low below the 1.35 handle but was picked up by bids before we entered testing support levels below 1.3480. We have managed a rally back into the 1.35 handle and the 1.3530’s gave us the summit into the closing hour, back into the sideways channel and all to play for at the start of next week.

Key Events:

Michigan consumer sentiment index falls

Obama: “Rebels received heavy flow of support, weapons from Russia; Russia has refused to de-escalate crisis; US has capacity to increase sanctions on Russia and is prepared to do so”, - Jamie Coleman, FXBeat.

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