Greece Votes NO, Pressure For Deal Intensifies

GBPUSD – technical overview

An impressive rally to fresh 2015 highs has stalled out ahead of the 1.6000 psychological barrier, with the market reversing lower and exposing a drop back towards some internal support in the 1.5550 area. A daily close below 1.5550 on Monday will open the door for a more pronounced bearish reversal towards 1.5000, while inability to do so will keep the immediate pressure on the topside for an eventual retest and break above 1.6000.

• R2 1.5733 – 1Jul high – Strong
• R1 1.5645 – 3Jul high – Medium
• S1 1.5500 – Psychological  – Strong
• S2 1.5422 – 11Jun low  – Medium

GBPUSD – fundamental overview

UK Halifax house prices and new car registrations aren’t likely to influence trade in the Pound on Monday, with the currency focused on the broader macro themes and flows. For the moment, the Greek NO vote is commanding all the attention and the uncertainty the vote has invited has opened some flight to safety demand for the US Dollar. Looking ahead, US ISM non-manufacturing is due in the North American session. Some neutral to dovish talk from BOE Haldane in the previous week could also be weighing on the Pound a bit in the new week.

USDJPY – technical overview

Although the bullish structure remains firmly intact, following the recent break to fresh multi-year highs, the market has entered a period of healthy correction and consolidation after stalling ahead of 126.00. Medium-term stretched studies are unwinding from overbought, with room for further weakness below 122.00. But any setbacks below 122.00 should be very well supported ahead of 120.00 in favour of a bullish resumption.

• R2 123.72 – 2Jul high – Strong
• R1 123.19 –3Jul high – Medium
• S1 121.85 – 6Jul low – Medium
• S2 121.00 – Figure – Strong

USDJPY – fundamental overview

Flows in the Yen have had very little to do with Japanese fundamentals in recent trade and so much more to do with developments abroad. It has become quite clear that the Yen still shares traditional correlations with flight to safety demand, and the currency has rallied in recent trade on the back of the uncertainty surrounding Greece, following the news of the weekend NO vote out of Greece. Moreover, we have also seen setbacks in USDJPY on account of the softer US employment report last week, which could keep the Fed from getting too aggressive with monetary policy reversal. Looking ahead, US ISM non-manufacturing is the big release in Monday trade.

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 a recovery back towards 1.0815 in the days ahead, with any setbacks expected to be very well supported above 1.0300 on a daily close basis. Look for a push back above 1.0575 to strengthen the constructive outlook and accelerate gains. Ultimately, only a daily close below 1.0300 would compromise the recovery outlook and give reason for pause.

• R2 1.0575 – 4Jun high – Strong
• R1 1.0525 – 2Jul high – Medium
• S1 1.0355 – 6Jul low – Medium
• S2 1.0315 – 29Jun low – Strong

EURCHF – fundamental overview

The major cross rate has been impressively well supported despite ongoing uncertainty surrounding Greece and the outcome of the Greece referendum, which saw the Greek people vote NO and reject the current creditor proposal. It seems some rounds of intervention from the SNB have sent a strong message to the market the SNB will continue to aggressively battle any additional unwelcome flows into the Franc, especially if brought on by way of Euro outflows from Grexit risk.

AUDUSD – technical overview

A multi-day bearish consolidation has finally been broken to the downside, with the market taking out the yearly/multi-year low at 0.7533 to open the door for the next major downside extension towards 0.7000 further down. Daily studies are however a little stretched leaving the door open for some corrective upside before bearish resumption. However, any rallies should be well capped below 0.7819.

• R2 0.7657 – 2Jul high – Strong
• R1 0.7587 – 29Jun low – Medium
• S1 0.7463 – 6Jul/2015 low – Strong
• S2 0.7400 – Figure – Medium

AUDUSD – fundamental overview

A wave of risk off trade on the Monday open sent Aussie to fresh multi-year lows down into the 0.7400s thus far. The market was not excited with the news of the Greece NO vote, which now invites more uncertainty and the very real possibility of a Grexit. At this point, price action over the coming sessions will be heavily influenced by developments on this front and market participants will be looking to see if a deal can finally be reached to save Greece from exit. But domestic fundamentals should not be ignored, with the RBA set to meet tomorrow. The market is looking for the RBA to remain on hold, while maintaining a dovish outlook. On top of the current Greece saga, softer local data, declining iron or prices, and a cooling China are all variables that should keep the RBA leaning to the accommodative side and the Australian Dollar on the defensive.

USDCAD – technical overview

Last week’s push through 1.2563 confirms a fresh higher low at 1.2128 and opens the door for the next major upside extension and retest of the 1.2835, 2015 high in the days ahead. At this point, look for any setbacks to be very well supported ahead of 1.2300, while only a drop below 1.2128 delays the highly constructive outlook for the pair.

• R2 1.2784 – 31Mar high – Strong
• R1 1.2633 – 2Jul high – Medium
• S1 1.2500 – 30Jun high – Medium
• S2 1.2475 – 1Jul low – Strong

USDCAD – fundamental overview

Although last week’s softer than expected US employment report weighed on the pair a bit, buyers were quick to emerge into dips. A combination of discouraging Canada GDP data, a pullback in OIL prices, and flight to safety flows following the Greece NO vote, have all helped to keep the US Dollar well supported. Looking ahead, Canada Ivey PMI and US ISM non-manufacturing are the key releases in Monday trade.

NZDUSD – technical overview

The market continues to extend declines to fresh yearly and multi-year lows, with the pair closing in on a measured move downside objective in the 0.6500 area. However, with daily studies now tracking in oversold territory, there is risk for a short-term corrective bounce in the sessions ahead. But any rallies should be well capped ahead of 0.7000.

• R2 0.6810 – 1Jul high– Strong
• R1 0.6736 – 2Jul high– Medium
• S1 0.6647 – 2Jul/2015 low – Strong
• S2 0.6600 – Figure – Medium

NZDUSD – fundamental overview

There has been an aggressive upgrade of RBNZ rate cut expectations, with the market now pricing in not one but three more cuts over the coming months. The 8th consecutive monthly decline in dairy prices has farmers deeply concerned, and with the dairy sector accounting for New Zealand’s biggest source of exports, the economic headwinds from this deterioration will be significant. New Zealand business confidence is also on the decline and does nothing to encourage the central bank from holding steady. Moreover, Kiwi is still the highest yielding currency of the developed economies and as such, is highly exposed in risk off settings. The uncertainty from the latest Greece NO vote and a rapidly cooling China have been additional thorns at the side of Kiwi, which now closes in on PM Key’s 0.6500 target.

US SPX 500 – technical overview

The market has stalled out after posting record highs in May, with the lack of bullish momentum suggestive of exhaustion and warning of deeper setbacks ahead. Look for the latest topside failure and bearish reversal below 2100 to strengthen the outlook and open a break below critical support at 2040, which guards against 2000 further down. Rallies should now be well capped below 2100 on a daily close basis.

• R2 2100.00 – Psychological – Strong
• R1 2088.00 – 2Jul high – Medium
• S1 2040.00 – 11Mar low – Strong
• S2 2000.00 – Psychological – Strong

US SPX 500 – fundamental overview

The equity market has failed to establish any meaningful bullish momentum since breaking to fresh record highs in May and could be at risk of forming a major top. The escalation in the Greek crisis has opened another round of setbacks, with the weekend NO vote upgrading the risk of Grexit. Meanwhile, even with the softer US employment data last week, the Fed remains on course for a rate liftoff in the months ahead, which acts a further disincentive to be long equities.

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 upside in the sessions ahead, in an attempt to carve out a more meaningful longer-term base. The most recent bounce back above 1170 helps to confirm the basing outlook, while only below last week’s low at 1157 would negate and open the door for a retest of the 2014 low at 2031 further down.

• R2 1206.00 – 18Jun high – Strong
• R1 1188.00 – 29Jun high – Medium
• S1 1157.00 – 2Jul low – Medium
• S2 1143.00 – 17Mar low – Strong

GOLD (SPOT) – fundamental overview

Quite surprisingly, the GOLD market has been unable to catch a significant bid in recent trade, despite a major cloud of uncertainty hanging over Greece and its future in the Eurozone. However, the weekend NO vote in the Greece referendum is definitely propping the yellow metal in early Monday trade, with medium-term players stepping in and buying the commodity as a hedge against Grexit and the unwelcome risk in markets at the moment.

Feature – technical overview

USDZAR is locked within a well defined uptrend, with the market consolidating off recently established 2015 highs. A medium-term higher low is in place just over 11.6900, with any setbacks expected to be very well supported above the level ahead of the next major upside extension back above 12.6365. Ultimately, only a break and close below 11.6900 would negate.

• R2 12.6375 – 8Jun/2015 high – Strong
• R1 12.5000 – Psychologica – Medium
• S1 12.0540 – 25Jun low – Medium
• S2 11.6945 – 6Apr low – Strong

Feature – fundamental overview

The South African economy is already not in the best shape, and when you throw in Grexit risk and ongoing China stimulus measures to support a collapsing China equity market, currently in its largest plunge since 1992, this opens the door for more significant downside pressure in the risk correlated emerging market currency. Power outages and rising taxes in South Africa are also Rand negative drivers that should not be overlooked.