Collapse of Dutch Government A Credit Negative

<p>Collapse of Dutch Government A Credit Negative. The Dutch Prime Minister Mark Rutte and his entire Cabinet resigned on Monday after failing to agree on […]</p>

Collapse of Dutch Government A Credit Negative. The Dutch Prime Minister Mark Rutte and his entire Cabinet resigned on Monday after failing to agree on plan to reduce the country’s deficit as told by EU rules. Rutte talks on a new austerity package collapsed over the weekend. The outgoing PM Rutte will be speaking at 2pm GMT today in the Hague.
EUR/USD
Range: 1.3145 – 1.3179
Support: 1.3145
Resistance: 1.3180

Euro-dollar closed in NY at 1.3156. Trade through Asia was initially contained within a very tight range of 1.3147-1.3158, dipping down to mark session lows at 1.3145 as rate reacted to Aussie’s fall following the weak release of Australian inflation data, before recovering back, touching overnight highs at 1.31602 ahead of the European open. The rate retains a firm tone, though conditions through the overnight session described as very subdued. Offers seen placed between 1.3160-1.3170, a break to open a move on toward 1.3180 ahead of 1.3200. Support seen at 1.3145-1.3140 ahead of 1.3125-1.3120 with further interest noted between 1.3110-1.3100. Stronger demand noted at 1.3070 with corporate demand interest placed from below 1.3050.

GBP/USD
Range: 1.6110 – 1.6141
Support: 1.6110
Resistance: 1.6150

Cable closed in NY at 1.6125 after recovering to 1.6135 in this session and holding above 1.6100 into the close. Trade in a generally subdued Asian session was contained within a tight 1.6110.6130 range and seen struggling to edge higher in tandem with euro-dollar and thus allowing euro-sterling to break out of its overnight range of 0.8155-0.8161 to 0.81675, as this rate extends its recovery off Monday’s lows at 0.8149. Offers remain in place at 1.6130-1.6135 ahead of 1.6150-1.6160, a break to open a move on toward 1.6180. Support remains at 1.6110-1.6100 ahead of stronger interest into 1.6075. For the cross, support remains around 0.8150, a break and clear below to open a deeper move toward 0.8130 ahead of 0.8120. Resistance 0.8180-0.8185 ahead of 0.8200-0.8205.
Gold
Range: 1,634.31 – 1638.57
Support: 1,634.39
Resistance: 1,642.03

Gold prices remained in a tight range overnight 1,634.31 – 1,638.57 after skidding lower in European trading in reaction to renewed strains in the eurozone with uncertainly of the French presidential election and difficult decisions in the Netherlands. Also poor reports of physical demand from Indian merchants are not helping matters to mount a convincing price rally. Gold also continues to be influenced by the tone of this week’s FOMC rate decision on Wednesday. Support now looks at 1,634.39, 1,626.75 and 1,614.40 with resistance at 1,642.03, 1,646.75 and 1,654.38.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.