Littlefish FX | Jun 30, 2015 05:23AM ET
Market Commentary
Greece of course will continue to be in the spotlight with the bulk payment due to the IMF and Greek officials already saying the payment won’t be made. It is Month End and Quarter End as well which should make it even more volatile as a lot of portfolio rebalancing flows tend to go through today.
EUR/USD once again staged an aggressive retracement from the 1.0955 lows of the Asian session resulting in a high of 1.1279 into the New York afternoon leaving a number of short term players scratching their heads with a viable explanation for the swift turnaround being attributable to weight of positions or perhaps to unwinding of positions as worries about Greece makes euro less attractive as a funding currency. This morning, the pair is trading slightly heavy and generally consolidating around the familiar 1.1200 pivot. The euphoria might be short lived with downside momentum towards 1.1145 and then 1.1050 key support levels over coming sessions as Grexit uncertainty prevails. However, given the illiquid and choppy movements, important to respect that there could be further squeeze up the 1.1245 and 1.1280 initial resistance levels on thin liquidity or tape bombs hitting the wires again. Today, Greece has a 1.6 billion euros payment to IMF but it is already a foregone conclusion that the payment will not be made. Given the uncertainties about the future path for Greece, especially heading into the referendum this weekend.
The flock to safety continues as Greek uncertainties weigh, USD/JPY trades top heavy ahead of the initial resistance levels of 123.00/20. Interbank reports suggest Exporter and month end related flows have played a factor this morning, with the pair pushing below the initial 122.30 level before finding some buying interest as regional equities recovered. 122.00/121.80 should be firmer supports.
GBP story was all about the major cross EUR/GBP yesterday, printing a massive bullish outside day pattern in the daily charts. Interbank reports suggest profit taking on EUR/GBP bearish views during the market open gap lower, with players looking to revisit the trade once month end requirements of real money names have been fulfilled, and especially once we get further clarity with Greece. We also get revisions in UK Q1 GDP later this afternoon which could lead to some volatility.
Technical Commentary
EUR/USD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
GBP/USD: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
USD/JPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bullish
EUR/JPY: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
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