Market expectation

Currency dealers will keep paying attention to equity markets in Europe and the U.S. later in the day in the absence of other significant trading cues such as economic data.
Pound currently pulled lower by euro-dollar's retreat. The rate easing toward reported support at USD1.6450. A break here may open a deeper pullback toward USD1.6410/00. Move seen as euro-sterling holds tight around stg0.8690.
EURUSD grinds its way down to USD1.4306, but reported demand place toward USD1.4300 so able to cushion the early pressure. Stops suggested on a break of USD1.4290, which if triggered to expose Friday's NY pullback lows at USD1.4276 (seen after rate rallied to highs of USD1.4377). A break here may expose USD1.4250. Resistance remains at USD1.4350/60, a break to open a move back toward Friday's rally highs at USD1.4377, with offers noted from here through to USD1.4400. USD1.3950/1.4450 structure remains in play and expected to draw protective action if either side is threatened.
European stocks are expected to open sharply higher Monday, gaining momentum from positive U.S. housing data last week, a bright start in Asia and a surge in commodities.
The dollar and euro may rise against the yen for the next few days, but since investors are reacting to volatile share markets, any short-term moves are unlikely to turn into a long-lasting trend, dealers said.