Growth in business activity in the Eurozone has slowed for the second month in a row, notably in France. The June PMI composite index for the area came in at 52.8. On a week where not much is happening, Saxo’s John Hardy says it looks particularly interesting for EURUSD. He says EURUSD 1.3670-80 is the key resistance level.  

Hardy also warns that there are fears that the FED is behind the curve. He says that looking at the FOMC’s wording last week, it’s clear little has changed and that it was on the dovish side. Although he says dollars were selling off the back of the statement he wonders if the reaction is justified. Hardy also points out that interest rates have hardly moved and were pretty high going into the meeting.

So this week is all about risk appetite. Hardy believes currency markets will be reflecting on the Japanese yen. EURJPY is currently trading around 138.34 and USDJPY around 101.85. He says the yen tends to be a ‘risk on, risk off’ currency.