- EUR/USD hits 1.0821 before recovering to 1.0865 levels.
- Dollar index rises to highest level in about 3 months at 98.061.
- AUD/USD new 6 year low at 0.7328, hurt by gold slide.
- Gold fell 4% to 5 year low at $1080.
- Merkel dogged by coalition tensions over Greece.
- Greek banks open, capital controls remain, stock market closed.
- EUR/CZK continues to flirt with the low 27's, CNB floor is at 27.000.
- European Commission prepared extensive report on Grexit.
- Euro zone May current account NSA 3.4bln vs previous 22.0bln revised. SA 18.0bln vs previous 24.0bln revised.
- Euro zone May Net Investment Flow 41,0bln vs previous 40.3bln revised.
- Switzerland sight deposits rose to 460.858bln in week July 17 from 460.007bln the previous week.
- (0830 ET/1230 GMT) Statistics Canada releases wholesales trade data for the month of May.
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade operation 15-year Fannie Mae/Freddie Mac (max $475 mn).
- (1300 ET/1700 GMT) Fed Board meeting to discuss final rule & order under Section 165 of Dodd-Frank Act.
- (1430 ET/1830 GMT) Fed Trade operation 30-yr Ginnie Mae (max $925 mn).
FX Recap
USD: The dollar was just 0.1 percent off a 3-month high of 98.061 hit overnight against a basket of currencies. It was roughly steady at 124.13 yen and down 0.3 percent against the euro at 1.0861.
EUR/USD is supported around 1.0800 levels and currently trading at 1.0836 levels. It has made intraday high at 1.0863 and low at 1.0819 levels. Absent releases in the euro area at the beginning of the week, the focus of attention today will be in Greece, where banks has re-opened to the public after three weeks of holidays, albeit with the capital controls still in place. The USD keeps its gains vs. the Euro at the end of the week, with EUR/USD in a consolidative pattern around 1.0900. While the Greek crisis is not going to completely disappear from the radar any time soon, there is definitely a loud sigh of relief in Europe. In the week ahead, easy on macroeconomic data, BoE Minutes and flash manufacturing and services PMIs from Germany, France and the whole euro zone will be drawing the attention of traders. Initial support is seen around at 1.0789 and resistance at 1.0896 levels. Option expiries are at 1.0800 (991M), 1.0900 (759M), 1.1000 (551M).
USD/JPY is supported around 124.00 levels and posted a high of 124.36 levels. It has made intraday low at 124.00 and currently trading at 124.21 levels. The greenback edged lower versus the yen this session on the back of profit-taking after the buck touched fresh six week highs against it major competitors backed by Fed Chair Yellen's hawkish comments and the recent two back-to-back sessions of upbeat US macro data releases last week. Japanese banks will be closed today in observance of Marine Day. Near term resistance is seen at 124.57 and support is seen at 120.63 levels. Option expiries are at 122.50 (600M), 123.00 (765M), 1.2385 (500M).
GBP/USD is supported below $1.5600 levels. It made an intraday high at 1.5626 and low at 1.5537 levels. Pair is currently trading at 1.5560 levels. The UK currency eased from its intraday high and slid well below the 1.56 threshold on Monday. The week ahead in the UK does kick off with the public finances release on Tuesday (more on this later), but market participants will sharpen their focus more on the MPC minutes due Wednesday, and retail sales figures out the following day. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels. Option expiries are at 1.5535 (268M), 1.5600 (170M).
NZDUSD is supported above 0.6500 levels and trading at 0.6577 levels and made intraday low at 0.6503 and high at 0.6599 levels. The New Zealand dollar was pushed higher after the PM expressed caution about the scale of the currency's recent fall. Traders said the kiwi had recovered some ground after PM John Key said the currency's 25 pct fall over the last year had been faster than expected. By 0740 GMT it was 1.1 percent higher at $0.6582, having earlier neared last week's six-year low of $0.6498. Initial support is seen at 0.6465 and resistance at 0.6600 levels.
AUD/USD is supported above 0.7350 levels and trading at 0.7373 levels. It has made intraday high at 0.7390 levels and low at 0.7326 levels. Pair has opened up further downside potential, now en-route to 0.73 levels, after absorption of bids through 0.7350, with both, broad-based USD strength and a collapse in Gold creating the perfect bearish storm. There is little in the way of decent support until 0.7185. Weak commodities weighing on AUD sentiment as terms of trade deteriorate. Market will eye on macroeconomic release from Australia ahead in the week. Initial support is seen at 0.7325 and resistance at 0.7647 levels.
