Greece remains the main focus for today, as it reaches an agreement on a five-year austerity plan with EU–IMF inspectors

<p>Oil prices fall as IEA raises supply Greece has reached an agreement with EU-IMF inspectors on five-year austerity plans. Newspaper headlines late in New York […]</p>

Oil prices fall as IEA raises supply

Greece has reached an agreement with EU-IMF inspectors on five-year austerity plans. Newspaper headlines late in New York sent EUR/USD 150 pips higher but the austerity plan still needs to go through parliamentary voting, expected on June 29-30. Elsewhere, oil dropped by as much as $5 overnight after the IEA agreed to release 60 million barrels in the coming month to offset Libyan supply disruptions. In Australia, RBA’s Lowe says the central scenario is for stronger growth; a rate rise might be needed if the central scenario does happen. The Chinese Yuan is today fixed six pips higher at 6.4742, as compared to yesterday’s fix of 6.4736.

EURUSD
EUR/USD
Range: 1.2434-1.4279
Support: 1.4090
Resistance: 1.4450
The Asian and early European sessions seem to be taking a breather from what has been a week of absolute tail chasing. We really should adhere to what we’ve have been writing all week for this pair: fade the extremes 1.4000-1.4500. Today we have the release of German IFO data and GDP from the US for Q1 and durable goods orders but as of late, it will be Greek headlines that will dominate this market. China’s Premier also starts a five-day visit to Europe though we can only see positive comments for China’s support for the peripherals.
GBPUSD
GBP/USD
Range: 1.6004 – 1.6025
Support: 1.5930
Resistance 1.6150

 

Sterling broke the 1.6000 level yesterday in a risk aversion market, only to bounce back above on risk positive news from Greece. There is no UK data again and I feel this pair will be dominated by the risk sentiment driven primarily by EUR/GBP on headlines on the Greek package. Although being a Friday and with liquidity at a premium, I wouldn’t rule out a short squeeze into the New York session. Keep an eye on the wires for comments from BoE Governor King; will he save the wobbly pond?

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