With oil prices breaking records daily and commodity prices in general rising the Euro zone has been suffering from rising inflation, and now it's on the verge of being hit by increased interest rates.
Euro zone consumer price inflation reached a new record high of 4.0% year-on-year in June, up from 3.7% in May, and above the expected rate of 3.9%, according to an initial estimate released by the European Union's statistics office, Eurostat. Most analysts think it is inevitable that the European Central Bank will hike interest rates to 4.25% from 4.0% at its rate-deciding meeting on Thursday.
The ECB has a  2.0% CPI target.

Italian CPI figures for June were 3.8%.

The euro slipped to $1.5773 from New York's Friday close of $1.5790.
However at the end of May 2008 it was at $1.5557 so it has had a strong month.

The U.S. Federal Reserve, at a rate-setting meeting last week, said it was worried about inflation but gave no sign it would imminently act to support the dollar.

Stock Markets fell dramatically throughout the world in June.

European government bond prices also plunged, with the German 10-year bund yielding 4.64%, up from 4.53% on Friday.

July 1st 2008

The Euro/Pound is moving within Bollinger bands and volatility is low.

The Pound/Dollar is in an uptrend supported by 1H exponential moving averages. The volatility rises. Bollinger bands are parallel and form the trend. ForexTrend 1H, 4H (Mataf Trend Indicator) is in a bullish configuration. 1H ForexSto (Modified Stochastic) indicate a bullish pressure on GBP USD. The uptrend should continue on 2,0180 resistance.

14:00 CET  The £ breaks trough the 2$ barrier