Default woes move from Greece to the US as credit rating agency Fitch says it will put the country on negative watch unless it raises its debt ceiling by August 2

<p>AUD/USD Range: 1.0535-1.0614 Support: 1.0500 Resistance: 1.0700 The RBA minutes were less hawkish than the market had been expecting, with the central declaring it had […]</p>

AUDUSD
AUD/USD
Range: 1.0535-1.0614
Support: 1.0500
Resistance: 1.0700
The RBA minutes were less hawkish than the market had been expecting, with the central declaring it had been ‘prudent ‘in its decision to keep rates steady at 4.75%. The RBA noted that even though the economic outlook suggested a need for a rate rise, recent data didn’t make the case for an ‘adjustment ‘ to policy. This sent the AUD off 80 pips. As has been the case for the AUD lately, calling the next rate rise is driving the currency. There’s a preference to play AUD against JPY with a correlation against global equities (risk on risk off scenario).
EURUSD
EUR/USD
Range: 1.4303-1.4384
Support: 1.4250
Resistance: 1.4450
We will get the results of the Greek government no confidence vote this evening so expect a day of rumours on this event. Anything other than full support will be a surprise. The Asian session saw stops triggered through 1.4350 as it was the US that made default headlines after credit agency Fitch said it will put the US on negative watch unless the US debt ceiling is raised by August 2. If the US does not meet its coupon payment on August 15 then the US rating will be moved to restrictive default. If this was to happen then it is unlikely that the US will regain its AAA rating. As with GBP, I suggest trade headline news if possible and fade the extremes between 1.4000 and 1.4500.
GBPUSD
GBP/USD
Range: 1.6205 – 1.6254
Support: 1.6150
Resistance 1.6450

 

Sterling is being dragged by the US dollar and cross moves generally as the market is still very undecided about whether global equities have already corrected dragging the risk trader lower, or if this is just the start of the global risk off correction. The main event this week for GBP will be the release of the MPC’s minutes on Wednesday and what direction the new Broadbent will have voted in at his first meeting. Anything other than following the majority will be a surprise to the market. Range trading for this pair is 1.6000-1.6500 on the wide.

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