FXstreet.com (Barcelona) – The bloc currency has accelerated its decline on Tuesday, trading in the 1.2270 zone as risk aversion is gathering pace.
EUR remains under pressure against a backdrop of increasing rumours involving Spain and its banking system, after a first tranche of €30 billion will be paid to the country at the end of July. The total aid package ammounts €100 billion.

As of writing, EUR/USD is losing 0.30% at 1.2274 facing the next support at 1.2230 (low Jul.9) ahead of 1.2190 (low Jul.1 2010) then 1.2151 (low Jun.29 2010) and 1.2132 (50% of 0.8225-1.6038).
On the upside, a breakout of 1.2365 (prior hourly low) would expose 1.2401 (high Jul.6) then 1.2456 (MA10d) and 1.2508 (low Jun.4).

FXstreet.com (Córdoba) – The Cable weakened and dropped to fresh lows into the North American open, mirroring moves in EUR/USD and weighed by dovish comments from BoE Governor King. King said the UK economy is not showing signs of recovery expected and that the Euro crisis causing ‘great black cloud’ of uncertainty.

GBP/USD was rejected from a high of 1.5548 during the European trade and fell over half a cent in recent dealings to record a fresh daily low of 1.5492 before finding support. At time of writing, the pair is quoting at the 1.5505 area, now down 0.1% on the day.

As for technical levels, below the 1.5490 area, next supports are seen at 1.5470 and 1.5450, while on the upside, resistances could be found at 1.5550, 1.5580 and 1.5600.

FXstreet.com (Barcelona) – The Australian dollar has continued to appreciate against the greenback during the afternoon European trading. The pair has operated in the range of 1.0158 and 1.0247 today, most notably dictated by the mixed bag of Chinese economic during the Asian session this morning.

According to UBS analyst Geoffrey Yu, “We remain firmly neutral on the pair, with a strong short term support at 1.0145 followed by 1.0108, with resistance is at 1.0329. Our perspective for one month is 0.9700, falling to 0.9500 after three months.”

In the U.S., the NFIB Business Optimism Index (June) gave a score of 91.4, from 94.4 the previous month. At the time of writing, the cross is operating in the area of 1.0225, advancing at a rate of +0.17% above its opening price.

FXstreet.com (Barcelona) – The US NFIB Business Optimism Index results for June released on Tuesday showed a considerable decrease to 91.4 points from 94.4 points in May.

According to Rob Carnell from ING, as another indicator points to an economic slowdown in the US, the Fed might be disposed to introduce further stimulus in the nearest future: “Though the 1 August FOMC meeting might be a bit early, given the ongoing Twist 2 policy, a further round of unconventional easing at the Sept 13 meeting (a press conference meeting) is beginning to look more probable.”

FXstreet.com (Barcelona) – The US NFIB Business Optimism Index results for June released on Tuesday showed a considerable decrease to 91.4 points from 94.4 points in May.

According to Rob Carnell from ING, as another indicator points to an economic slowdown in the US, the Fed might be disposed to introduce further stimulus in the nearest future: “Though the 1 August FOMC meeting might be a bit early, given the ongoing Twist 2 policy, a further round of unconventional easing at the Sept 13 meeting (a press conference meeting) is beginning to look more probable.”

FXstreet.com (Barcelona) – The morning release of trade data in China during the month of June today presented a mixed outlook on the macro front, however the details brought unequivocally bad news for the Australian dollar.

Although the trade balance was much stronger than expected at USD $31.72B (cons. USD $24B), imports in general grew modestly, and imports of iron ore in particular were down -8.6% month in month. According to Strategy Analyst Geoffrey Yu at UBS, “A monthly decline on this scale is not unheard of and is still within the realm of monthly statistical variation, however it could be the first sign of cooling Chinese demand for Australian commodities and AUD/USD saw some slippage on the headlines”.

In terms of the AUD/USD, “We remain staunchly neutral on the pair, with strong near-term support is at 1.0145, and followed at 1.0108, while resistance is located at 1.0329. Our one month outlook is 0.9700, and 0.9500 after three months” he adds. The pair is currently trading at 1.0230, up +0.22% in the afternoon of European trading.

FXstreet.com (Barcelona) – Stronger than expected UK manufacturing and industrial production as well as the trade balance gave a boost on sentiment to the GBP/USD that rallied as high as 1.5549. However, the pair is finding hard to keep above the declining 100-hour moving average, which is taking down the pair as time goes by. The GBP/USD trades at 1.5530 ahead of the American opening.

US earnings season might also improve the mood in the market and help the pair obtain a higher quote. The just released US NFIB Business Optimism Index states a drop from 94.4 to 94.1 in June.

Mataf.net analysts point to resistances at 1.5550, 1.5575 and 1.5620. On the downside, supports might be found at 1.5525, 1.5495 and 1.5460.

US: NFIB Business Optimism Index dropped from 94.4 to 94.1 in June

FXstreet.com (Barcelona) – The latest developments with regards to Spain via the EU Finance Ministers meeting overnight is somewhat mixed. After a 9-hour meeting the official statement noted that the Eurogroup has reached a political understanding on the draft MoU on Spain’s assistance program. The aid is to be provided to Spain via the EFSF until the ESM becomes available and then transferred to the ESM without gaining seniority status (although Schaeuble’s comments were contradictory as we discuss below).

The final approval of the Spanish program is envisaged by the 20th July. Ministers also confirmed earlier press reports of the one-year extension to Spain’s deficit reduction program to 2014. In a post meeting interview Mr. Juncker also told the press that he foresees €30B of the €100B Spanish loans to be disbursed by the end of the month with the remainder most likely following in the autumn after a more detailed review of the banking sector. Juncker also said that the bailout terms for Ireland and Portugal could be eased.

Although some clarity around Spain’s bailout is welcomed the “ESM direct bank recap” proposal is moving rather slowly as technical discussions will only start in September. Direct ESM recap was one of the EU Summit highlights at the end of last month and there had been some expectations the new regime will apply retroactively to Spain. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Whilst the official statement mentioned above acknowledges this, the German Finance Ministers’ comments were somewhat contradicting, and it appears the tension between Germany and the rest of the Eurozone is still quite evident.”