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>

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).
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.
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.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (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.