The Greek saga takes center stage

 

The Euro dominated last week’s market with some strong losses that caused the Euro to fall from its 1.4496 Tuesday high all the way to 1.4070 in a matter of two days. Technically the pair returned to the monthly down trend line that was breached in the last month, but failed to close below it on the daily chart. Fundamentally though the market took a rollercoaster risk ride with no target in mind; in fact, overall last week ended just 30 points lower than where it opened for the EURUSD pair, while the week’s spread was over 4 figures. Greece’s bailout package was estimated around 150 bln Euros but discretion on the details of the package by the Euro zone official’s caused spreads between Greek and German Bonds to set new records.

 

The USDJPY made little effort to draw attention with the week’s spread barely reaching a full figure even after Bank of Japan gave encouraging announcements about the economy moving in a positive direction. The EURCHF hit some fresh new record lows below 1.2000 but investors became a little wearier when Swiss Official Hildebrand and Danthine expressed concern that CHF strength is not in the best interest of the country. Finally in Australia RBA Governor Stevens gave hints that rates will have to rise again but July inflation figures are important for this decision.

 

 

 

Out of Europe the German Zew Economic Sentiment will be released at 09:00 GMT today with an expectation of -1.7 against the 3.1 previous result. Later in the day the US will also be releasing some important economic data about their Existing Home Sales which are expected just under the previous 5.05M result at 4.82M.

 

On Wednesday the UK will be releasing its MPC Meeting minutes at 08:30 GMT with an expectation of 2 voters for rising of interest rates, 7 votes on keeping interest rates unchanged and none voting for a reduction. Later in the day the US will be releasing its FOMC statement with expectation that interest rates will remain unchanged at less than 0.25%. The statement will be released at 16:30 GMT while the Press Conference will be held at 18:15 GMT.

 

Thursday’s important news will be the US’s unemployment claims which are expected unchanged at 414K at 12:30 GMT.

 

Finally on Friday we will have the German Ifo business Climate at 08:00 GMT which is expected at 113.6 versus the prior 114.2.

 

 

GBPUSD


 

The GBPUSD pair has given enough signals to show that a larger correction towards 1.5872 is in due yet has so far lagged in any direction. For now expect the pair to move back to 1.6366 after which a move should continue on the medium term with the target of 1.5872.