• GBP/CHF -0.6%
• AUD/USD +1.0%
• NZD/USD +1.1%

GBP/CHF

Bears Pound Sterling Crosses: Sterling bulls were hit hard on the session as a weaker than expected reading on both manufacturing and industrial production in the United Kingdom sparked the day's decline.  Adding to the precipitous fall, was a slower service sector PMI as sector figures dipped below the consensus figure for the month.  Subsequently, the day's data adds to speculation that rate cuts are likely to be considered in the third quarter as retail sector figures remain to the weak side.  As a result, scrutiny will more than likely be placed on any subsequent comments issued by policy makers following tomorrow's decision.  Cross selling also exacerbated the dip as EURGBP cross buying broke 0.7000 option barriers with further bearish bias slamming additional crosses.  At this point, pound pessimism may be short lived heading into the Asian session with expectations running high of further housing price increases according to sector figures released by Halifax in addition to an underlying hawkish bias on tomorrow's central bank decision.

Rumorville: With offers surrounding the 0.7020 figure on the EURGBP, profit taking looks to ensue.  Major leg activity looks short biased as well with offers currently on the 1.7535 and 1.7610 figures.  However, some resistance looks imminent as bids are awaiting a pullback on the 1.7475 and 1.7425 of GBPUSD.  Should price crunch through the ominous 1.7600 handle, a short squeeze may once again propel a short term lift.

AUD/USD

Metals Keep Aussie Buoyant: Aussie dollar bidding on the day was supported by healthy demand on highly coveted metals.  Copper prices once again tested up side resistance rising above the $2.60 contract figure, with zinc adding to positive dollar spot bias.  With the Reserve Bank of Australia retaining the current 5.5 percent on yesterday's decision, markets seem content on speculation of a possible rate hike consideration later on in Q2 should the economy turn itself around.  Feeding the notion was the recently narrowed trade balance figure and better than expected service figures.  Separately, buying out of Tokyo assisted in the break above the 0.7200 handle with a rumored leak of tonight's unemployment figure feeding U.S. based institutional buying.  Although some profit taking is inevitable, considerable offers are looking heavy at 0.7300.

Rumorville: Making easy work of even figured fib levels, bullish price action is setting its sites on the next area of resistance standing at the 0.7300 figure.  Bids are appearing at the 0.7250 level, contrary to 0.7305/10 figure sellers.  However, general stops may add to a squeezed push above the 0.7300.  As a result, next ceiling looks to be set at 0.7384.

NZD/USD

Traders Bid Kiwi: Traders bid the Kiwi dollar on sympathy in time with Aussie dollar demand for the day as the cross established a momentary top.  Offers still hover the pair and look to lead to further downside, as a rate cut seems likely priced in for the later part of the year.  With the rest of the week leaning thin in regards to economic data, further dollar based momentum looks to dominate the pair in the near term future. Technically speaking, current resistance remains in main focus as the pivotal neckline of a textbook hourly double bottom.  Should the current momentum hold with bulls piercing though the 0.6160 figure, the session close may be just enough for a press higher.  Near term barriers exist at the 0.6180 figure as selling interest resides at the 0.6175/80 figures.

Richard Lee is a Currency Strategist at FXCM.