It’s All Greek To Financial Markets

GBPUSD – technical overview

The market has broken to a fresh 2015 high beyond the previous peak at 1.5815, with the push exposing a test of the next key psychological barrier at 1.6000. Any setbacks from current levels should now be well supported above 1.5550, with only a break back below this level to take the immediate pressure off the topside.

• R2 1.6000 – Psychological – Strong
• R1 1.5930 – 18Jun/2015 high – Medium
• S1 1.5805 – 18Jun low  – Medium
• S2 1.5700 – 21May high  – Strong

GBPUSD – fundamental overview

Lack of first-tier data out of the UK on Monday will leave this market trading off broader themes and flows. For now, the major focus is the Greece saga and how it will all play out here. Today’s summit is expected to produce results, particularly after the news over the weekend that Greece had submitted another round of reforms. The Pound has been a relative outperformer in recent trade, with Cable to fresh 2015 highs on the back of solid economic data, highlighted by last week’s labour market report and retail sales. US existing home sales are due in North American trade and could factor a bit.

USDJPY – technical overview

Although the bullish structure remains firmly intact, following the recent break to fresh multi-year highs, the market has finally entered a period of healthy correction after stalling ahead of 126.00. Stretched studies are unwinding from overbought, with room for further weakness to 122.00. But any additional setbacks below 122.00 should be very well supported in favour of a bullish resumption.

• R2 124.44 – 17Jun high – Strong
• R1 123.80 –16Jun high – Medium
• S1 122.45 – 10Jun low – Medium
• S2 122.00 – Previous Resistance – Strong

USDJPY – fundamental overview

Nothing new from BOJ Kuroda on Monday and USDJPY has mostly been locked in some sideways trade. The major pair has been supported on dips for now ahead of 122.00, with renewed optimism for a Greece resolution helping to prop the correlated pair. Still with no signs of any additional BOJ stimulus and with the US Dollar coming back under some broad pressure, there is risk for some short-term Yen demand before the bearish Yen trend reasserts. Moreover, if there is no resolution on Greece, this could open a flight to safety bid, further adding to downside pressure in USDJPY. US existing home sales ahead.

EURCHF – technical overview

The market has finally leveled out after a multi-day drop out from the February high at 1.0815. From here, there is risk for recovery back towards 1.0815 in the days ahead, with any setbacks expected to be very well supported above 1.0400 on a daily close basis. Look for a push back above 1.0575 to strengthen the constructive outlook and accelerate gains.

• R2 1.0700 – 19Mar high – Medium
• R1 1.0575 – 4Jun high – Strong
• S1 1.0403 – 19Jun low – Medium
• S2 1.0305 – 7May low – Strong

EURCHF – fundamental overview

Lack of any real progress on Greece has kept the Euro in check, though there is a feeling in the air we could finally be getting down to it at today’s summit. Over the weekend, Greece submitted another list of reforms to its creditors and it appears there is a strong desire for a deal to get done. But inability to come up with any breakthroughs on the deal front will not bode well for this rate, with the Euro to come under renewed pressure. Still, the SNB remains committed to act to curb excessive overvaluation in the Franc, particularly if brought on by a fallout in Greece.

AUDUSD – technical overview

Overall, the broader downtrend remains intact after the market stalled out ahead of 0.8200 several days back. Look for a medium-term lower top to now be in place at 0.8163, in favour of the next major downside extension back towards and eventually below the current multi-year base from early April at 0.7533. Any corrective rallies should be well capped ahead of 0.8000, while ultimately, only a break back above 0.8163 will delay the bearish structure.

• R2 0.7934 – 20May high – Medium
• R1 0.7849 – 18Jun high – Strong
• S1 0.7710 – 18Jun low – Medium
• S2 0.7646 – 17Jun low – Strong

AUDUSD – fundamental overview

Optimism for a Greece deal is doing a good job of offsetting all of the negatives out of Australia at the moment. RBA officials have been talking down the Australian Dollar in recent weeks, on a account of a slowing economy, threat of cool down in China and slumping iron ore prices. And with the RBA leaving the door open for additional rate cuts, deeper setbacks are on the cards. But in the interim any signs of a deal out of Greece, would likely prop the risk correlated Aussie for a short while, before players stepped back in to sell rallies.

USDCAD – technical overview

The market looks like it may finally have based out at 1.1920, putting in a meaningful medium-term higher low, ahead of the next major upside extension and bullish trend resumption towards the 2015 high at 1.2835. Recent setbacks should now be well supported in the 1.2200 area, after the market reached a short-term double top objective. Ultimately, only a daily close below 1.2150 would delay the constructive outlook.

• R2 1.2361 – 15Jun high – Strong
• R1 1.2296 – 19Jun high – Medium
• S1 1.2200 – Figure – Medium
• S2 1.2127 – 18Jun low – Strong

USDCAD – fundamental overview

A mixed bag of data out of Canada on Friday, with inflation coming in hotter and retail sales coming in a good deal softer. It appears the disappointing retail sales figure has been factoring into price action a little more, with USDCAD finding renewed bids into the new week. For today, developments relating to Greece will likely influence direction, while US existing home sales and OIL sentiment will also get attention.

NZDUSD – technical overview

The recent break to fresh 2015 and multi-month lows confirms a medium-term lower top at 0.7744 and opens the door for the next major downside extension towards a measured move objective in the 0.6500 area. For now, the market will be focused on trying to establish below the psychological barrier at 0.7000, with the next key support level coming in to 0.6800. Any rallies should now be well capped below 0.7400.

• R2 0.7081 – 11Jun high– Medium
• R1 0.7012 – 17Jun high– Strong
• S1 0.6879 – 17Jun/2015 low – Medium
• S2 0.6800 – Figure – Strong

NZDUSD – fundamental overview

A softer NZ consumer confidence survey has failed to open any fresh downside in the New Zealand Dollar on Monday, with the risk correlated currency benefitting from some optimism surrounding Greece and the prospect for a deal. Exporter and real money demand has also been helping to prop the pair a bit. Still, a massive unwinding of Kiwi longs is underway and NZDUSD looks to be en route to 0.6500 against the Buck. Macro players continue to reposition to the short side, particularly with the risk correlated US equity market starting to show signs of rolling over. Last week’s much softer New Zealand GDP release and negative Kiwi NZ FinMin comments have only strengthened the bearish case. US existing home sales ahead.

US SPX 500 – technical overview

The latest break to fresh record highs has stalled out, with the lack of bullish momentum suggesting the market could be exhausted at current levels and poised for a significant corrective decline. The recent bearish daily close strengthens the outlook and could open the door for deeper setbacks towards critical support at 2040 over the coming sessions. Ultimately, only above 2137 negates.

• R2 2137.00 – 19May/Record – Strong
• R1 2128.00 – 18Jun high – Medium
• S1 2070.00 – 9Jun low – Medium
• S2 2040.00 – 11Mar low – Strong

US SPX 500 – fundamental overview

The equity market has failed to establish any meaningful bullish momentum after recently breaking to fresh record highs in May and could be at risk of forming a major top. A wave of solid first-tier US economic data over the past couple of weeks has helped solidify prospects for a sooner than later rate liftoff, and this reality is making it less attractive to be long equities at lofty levels. Renewed optimism for a Greek deal has helped to keep the market supported for now, but even with a deal, equity investors will be looking to head for the exits with rates in the US expected to move higher.

GOLD (SPOT) – technical overview

The market has been very well supported on dips since recovering from the 2014 base. The price action suggests the market could now be poised for a fresh bounce in the sessions ahead, in an attempt to carve out a more meaningful longer-term base. Look for a break back above recent highs at 1232 to strengthen this outlook. Ultimately, only a daily close below 1170 will negate.

• R2 1232.00 – 18May high – Strong
• R1 1206.00 – 18Jun high – Medium
• S1 1163.00 – 5Jun low – Medium
• S2 1143.00 – 17Mar low – Strong

GOLD (SPOT) – fundamental overview

Despite recent setbacks, the GOLD market continues to show signs of demand on dips. Many investors already feel that with currencies across the board looking less attractive in a low yield environment, and with global equities looking vulnerable at record highs, there is no better place for capital allocation than GOLD. Dealers cite plenty of interest around $1170. Buy stops reported above $1235.

Feature – technical overview

USDTRY is locked within a well defined uptrend, with the market consolidating off recently established record highs. A medium-term higher low is in place just over 2.5600, with any setbacks expected to be very well supported above the level ahead of the next major upside extension back above 2.8095. Ultimately, only a break and close below 2.5605 would negate.

• R2 2.8095 – 8Jun/Record – Strong
• R1 2.7500 – 16Jun high – Medium
• S1 2.6445 – 29Apr low – Medium
• S2 2.5605 – 21May low – Strong

Feature – fundamental overview

President Erdogan’s calls for a quick formation of a coalition government and some renewed optimism over the prospect for a Greece deal have been helping to fuel a welcome round of bids in a Turkish Lira that is recovering off record lows agains the Buck. Still overall, with the Fed expected to move on rates and plenty of uncertainty surrounding the Turkish economy, the emerging market currency remains at risk for additional weakness over the coming months.