Prospects of Greek Bailout Deal Sparks Short Covering

<p>Significant progress on securing a Greek bond-swap deal and a fresh bailout to the indebted country produced an aggressive short-covering during the US session, as […]</p>

Significant progress on securing a Greek bond-swap deal and a fresh bailout to the indebted country produced an aggressive short-covering during the US session, as Euro shorts run to the exits realizing this time around headlines carried enough substance to believe the finishing touches to a second bailout deal for Greece were finally underway.

Range: 1.3115 – 1.3146
Support: 1.3100
Resistance: 1.3159

Euro-dollar opened at 1.3130 in Asia having bounced strongly from NY lows of 1.2974 as talk that the ECB would swap its Greek bonds holdings for newly issued ones, prompted the start of renewed speculation that the Greek bailout deal would be signed on Monday. The pair rallied sharply, aided by strong US jobless claims and some aggressive euro-yen buying as risk appetite built quickly. Stops were taken out through 1.3120 to highs of 1.3159 before easing back into the close. Asian session has been quiet with the pair trading a modest 1.3122-46 range with most action seen in the crosses.

Selling interest just above the NY highs of 1.3159 and further offers layered up to 1.3200. Strong bids start from 1.3100 down towards 1.3180.


Range: 1.5794 – 1.5817
Support: 1.5759
Resistance: 1.5840

GBP/USD or “cable” opened in Asia at 1.5800 after a strong pull up from lows of 1.5655 as NY opened. The pair launched a strong recovery as risk appetite built on stronger US jobless claims and talk that the ECB might swap it’s existing Greek bonds estimated at €40bln for new ones under the same terms, in an effort to assist the push through of the Greek rescue plan on Monday. Cable rallied throughout the NY session peaking at 1.5817 before easing to 1.5800 into the close. Asian markets have been relatively calm with the pair trading a tight 1.5795-1.5818 range. Stops are said to lie above in the 1.5825/30 area ahead of offers at 1.5840/50. Euro-GBP has traded a 0.8302-15 range, with support seen towards 0.8280 and resistance at 0.8320/25.



Range: 1,727.88 – 1,734.91
Support: 1,712.25
Resistance: 1,752.60

Gold prices have built steadily higher in Asia this morning having been as low as 1,705.40 in NY yesterday. The metal has pulled away from the “drop zone” at 1,700 when solid support arrived towards last Friday’s lows of 1,704.70. The metal appears to be tracking risk appetite and has also received some support from buoyant crude prices in recent sessions. Physical demand out of Asia remains relentless, with demand so high dips are continuing to attract buyers and analyst forecasts still point to gains through 2,000 before the end of the year. The metal has traded up to 1,734.15 in Asia on the back of hopes that the long awaited Greek bailout will be signed off on Monday by the EU. Today’s support is seen at 1,712.25 and yesterday’s lows of 1,705.40. Resistance is up at 1,752.60 and 1,763.25.


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