Grexit Specter Haunts The Markets

<p>Grexit Specter Haunts The Markets. European markets opened to a quieter week yesterday, following the inconclusive G8 meeting on Saturday. The leaders of G8 countries […]</p>

Grexit Specter Haunts The Markets. European markets opened to a quieter week yesterday, following the inconclusive G8 meeting on Saturday. The leaders of G8 countries agreed that there is a need for balancing austerity measures with growth, in order to fight the crisis more effectively, although they failed to propose any specific strategies.
Range: 1.2783 – 1.2814
Support: 1.2780
Resistance: 1.2845

Euro-dollar closed in NY at 1.2818 after the rate had extended its recovery off session lows of 1.2725, with another IMM close boost taking the rate to late session highs of 1.2825. The rate touched an early high of 1.2820 in Asia, as the market was seen gearing up to take out upside stops above 1.2825, before turning lower, Japanese sales of Aussie-yen post Tokyo fix weighed on risk sentiment and squeezed euro-dollar longs with the added weight taking the rate to an eventual low of 1.2782. The rate recovered off lows, with added demand into early Europe taking the rate up to 1.2795, decent demand sitting into 1.2780, with the late Asian dip attracting buyers looking for another rally to take out upside stops through 1.2845 and 1.2850. However, sell interest noted up to 1.2900.

Range: 1.5811 – 1.5837
Support: 1.5810
Resistance: 1.5840

Cable closed in NY at 1.5826 after a late session recovery saw rate track euro-dollar’s stronger IMM close inspired rally which took it to late highs of 1.5841. This lagging of euro-dollar’s rise saw euro-sterling extend its recent recovery to 0.8098 but was seen meeting strong hedge fund sell interest placed toward 0.8100. Cable posted early Asian session highs at 1.5832 before turning lower, the drift down to session lows of 1.5811 slower than euro-dollar’s pullback which allowed the cross to ease back to 0.80825, after it too met stiff resistance at 0.8098 in this session. Early Middle East demand was seen into Europe, cable offers remain at 1.5840-1.5850, more at 1.5890-1.5900. Support 1.5810-1.5800 ahead of 1.5790.
Range: 1,586.35 – 1,594.35
Support: 1,587.28
Resistance: 1,592.75

Gold prices ended slightly higher as the markets consolidated after gains made from the previous week. A rally in risk assets failed to buoy gold prices further higher as signs of recent correlations between gold and “risk-on” assets have declined. Gold prices moved higher in early trading but fell after hitting resistance near 1,600.00. With the lack of major economic news and the lack of any new material developments from the G-8 summit meeting over the weekend, gold prices were traded on a relatively quiet session. Support now seen at 1587.28, followed by 1583.89 and then 1578.42, resistance looks at 1598.22, 1601.61, and a move higher at 1607.08.

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.