Clock Ticking For Greece, 72 Hours And Counting

GBPUSD – technical overview

The recent break below 1.5550 has shifted the focus back to the downside, with the market eyeing a retracement to the June 1 low at 1.5170. At this point, a break and close back above 1.5600 would be required to take the pressure off the downside  and open bullish resumption back towards the recent 2015 high at 1.5930.

• R2 1.5610 – 7Jul high – Strong
• R1 1.5552 – 10Jul high – Medium
• S1 1.5389 – 10Jul low  – Medium
• S2 1.5330 – 8Jul low  – Strong

GBPUSD – fundamental overview

A nice recovery in the Pound since Friday, with the market benefitting from optimism over a Greek deal. However, the currency managed to find some relative bids on the back of a better than expected UK trade data showing, with the deficit narrowing. Looking ahead, the economic calendar for Monday is exceptionally light and most of the focus will be on Greece and the headlines that come out with respect to reaction from the latest creditor ultimatum. However, we do get some market moving data on Tuesday, in the form of UK CPI.

USDJPY – technical overview

The recent breakdown towards 120.00 has forced a shift in the short-term structure, with the intense setbacks now opening the door for deeper declines in the days ahead back towards next critical support in the 118.00s. Monthly studies are tracking in overbought territory and there is plenty of room for additional weakness ahead. In the interim, any rallies should be well capped below 123.00 on a daily close bases, while only a close back above this figure would take the immediate pressure off the downside.

• R2 123.72 – 2Jul high – Strong
• R1 122.88 –10Jul high – Medium
• S1 121.70 – 10Jul low – Medium
• S2 120.41 – 8Jul low – Strong

USDJPY – fundamental overview

Domestic fundamentals haven’t factored into price action in this major pair over the past several weeks, with broader risk sentiment dictating flows. The market has been blowing with the wind of Greece developments and after creditors hit back hard over the weekend, demanding a complete capitulation from Greece, uncertainty has crept back in and could weigh more heavily in the sessions ahead. Greece has now been given 72 hours to pass reform and spending cut legislations as a precondition for bailout negotiations or be forced to face a temporary or permanent exit. Perhaps supporting USDJPY dips a bit have been the latest comments from Fed Chair Yellen which seem to still suggest her readiness for rate liftoff in 2015.

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 – 10Jul high – Medium
• S1 1.0355 – 6Jul low – Medium
• S2 1.0315 – 29Jun low – Strong

EURCHF – fundamental overview

Not the best of results over the weekend for risk markets, with the aggressive and stern response from Greece creditors casting serious doubt on what had been perceived to be a Friday resolution. Greece now has 72 hours to fully capitulate to creditors or face Grexit. Still, overall, reassurances from the SNB that it will continue to support dips in this market have been well received by investors, happy to ride on the central bank’s back whenever we see downside pressure.

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 0.7533 – Previous Base – Strong
• R1 0.7500 – Psychological – Medium
• S1 0.7372 – 8Jul/2015 low – Strong
• S2 0.7350 – Mid-Figure – Medium

AUDUSD – fundamental overview

A quiet economic calendar for Australia this week and this market will most likely trade of the broader macro themes of Greece and China. For the moment, the Australian Dollar is at risk for deeper setbacks after Greece creditors came back with a 72 ultimatum for Greece. If no progress is made by Tuesday, Greece could be faced with either a partial or permanent exit. Elsewhere, Fed Chair Yellen will give her semi-annual testimony this week, though she gave indication on Friday in Cleveland that she is still supportive of liftoff in 2015.

USDCAD – technical overview

The recent push through 1.2563 confirms a fresh higher low at 1.2128 and opens the door for the next major upside extension through the 1.2835, 2015 high in the sessions ahead. A break above 1.2835 will then expose the 2009 peak at 1.3065 further up. At this point, look for any setbacks to be very well supported ahead of 1.2563, while only a drop below 1.2300 delays the highly constructive outlook for the pair.

• R2 1.2835 – 18Mar/2015 high – Strong
• R1 1.2780 – 7Jul high – Medium
• S1 1.2645 – 7Jul low – Medium
• S2 1.2563 – 6Jul low – Strong

USDCAD – fundamental overview

The Canadian Dollar has been under a good deal of pressure in recent trade, with softer local data, declining oil prices and ongoing Greece uncertainty weighing. However, we have seen some renewed demand for the Loonie following Friday’s better than expected Canada employment. But it is unlikely this will be enough to shake USD longs, particularly with Fed Chair Yellen still signaling a rate liftoff in 2015. Moreover, the ultimatum Greece creditors have given Greece is not inspiring a great deal of confidence in the early week, with Gexit risk back on the table.

NZDUSD – technical overview

The market continues to extend declines to fresh yearly and multi-year lows, with the pair confined to a bearish channel and closing in on a measured move downside objective in the 0.6500 area. However, daily studies are now correcting from deep oversold territory, and there is risk for additional upside in the sessions ahead to allow for these studies to unwind. But any rallies should be well capped ahead of 0.6850.

• R2 0.6850 – Channel Top– Strong
• R1 0.6769 – 10Jul high– Medium
• S1 0.6650 – Mid-Figure – Medium
• S2 0.6621 – 7Jul/2015 low – Strong

NZDUSD – fundamental overview

RBNZ rate cut expectations have been creeping up these past few weeks, with a run of softer New Zealand data and deteriorating global sentiment factoring into forecasts. The economic calendar out of New Zealand is quite light this week, though we will get more insight into RBNZ direction with the release of CPI early Thursday. In the interim, the ongoing Greece saga will play a major influence on direction. The Fed policy outlook should also not be overlooked, and with Yellen indicating the Fed is still on course for rate hikes this year, this should act as a further cap on Kiwi gains.

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 2094.00 – 26Jun low – Medium
• S1 2040.00 – 11Mar low – Strong
• S2 2000.00 – Psychological – Strong

US SPX 500 – fundamental overview

US equity futures have held up rather well on this Monday despite another wave of uncertainty surrounding Greece. The market had gone into the weekend fully expecting a resolution following Greece’s latest proposal which was remarkably similar to a creditor offer pre-referendum. But creditors tightened up the screws and have now demanded a full capitulation. Greece has been given 72 hours to pass reform and spending cut legislations as a precondition for bailout negotiations or be forced to face a temporary or permanent exit. The market will likely continue trading off developments on this front over the coming hours.

GOLD (SPOT) – technical overview

The recent bearish close below 1160 diminishes the basing outlook for this market and opens the door for a more immediate retest of the the 2014 low at 1143, which guards against the critical multi-year base from 2014 at 1131 further down. At this point, a break back above 1175 will be required to take the pressure off the downside.

• R2 1188.00 – 29Jun high – Strong
• R1 1175.00 – 6Jul high – Medium
• S1 1143.00 – 17Mar/2015 low – Strong
• S2 1131.00 – 2014 low – Very Strong

GOLD (SPOT) – fundamental overview

Quite surprisingly, the GOLD market has been unable to catch any decent bids in recent trade, despite a major cloud of uncertainty hanging over Greece and its future in the Eurozone. Medium-term players continue to step in but are starting to lose patience with the lack of follow through in the face of events that should otherwise be traditionally supportive of the commodity. Right now, the market is waiting to see how Greece responds to an ultimatum from creditors to get with program and receive bailout money or face exit, either temporarily or permanently.

Feature – technical overview

USDTRY continues to trade within a broader well defined uptrend. Although the market has been locked within some consolidation over the past several sessions, setbacks continue to be very well supported and a higher low looks to be carving out at 2.6500 ahead of the next major upside extension beyond the recent record high at 2.8100 from June. Ultimately, only below 2.5500 would compromise the bullish outlook.

• R2 2.8100 – 8Jun/Record high – Strong
• R1 2.7170 – 6Jul high – Medium
• S1 2.6500 – 25Jun low – Strong
• S2 2.6000 – Psychological – Medium

Feature – fundamental overview

The Lira will be trading less on local fundamentals over the coming sessions and more so on broader external flows with Greece’s fate hanging in the balance following a 72 hour creditor ultimatum. But local fundamentals aren’t anything to get too excited about, particular with a coalition government yet to be formed.