Spain Eclipses Greece Pro Bailout Victory

Spain Eclipses Greece Pro-Bailout Victory. Greece avoided political chaos after pro-bailout party and victory in Sunday’s election, but that was not enough, as the market experienced one of the most disappointing and brief relief rallies one may recall, with the focus turning fully back to Spain.

EUR/USD
Range: 1.2588 – 1.2615
Support: 1.2561
Resistance: 1.2626

Euro-dollar closed in NY at 1.2577, off late session extended lows of 1.2557, with rate continuing its recovery through Asian to a high of 1.2617. Move up was aided on a mix of short covering, prompted in part by position adjustment ahead of the two-day FOMC meeting, as well as market reacted to positive comments from G20, a draft statement set out the EU’s aim of bringing about closer integration of the banking system as well as steps toward tighter fiscal coordination. Eyes continue to watch Greece, as parties there try to form a coalition government following the weekend’s election, with Spanish debt woes also of note. Resistance is now seen at the overnight high of 1.2617 a break to open a move on toward 1.2630 ahead of 1.2650-1.2655. Support seen at 1.2580 ahead of a 1.2557.

GBP/USD

Range: 1.5677 – 1.5695
Support: 1.5648
Resistance: 1.5720

Cable closed in NY at 1.5670, off session lows of 1.5637, and continued to recover into Asian trade with rate trailing euro-dollar’s stronger correction to a session high of 1.5692. Euro-sterling, which had seen lows Monday of 0.8022, edged up from 0.8027 to 0.8041 reflecting the strong euro recovery. Cable settled between 1.5680-1.5690 through the Asian afternoon and into Europe. Early Europe has seen showing demand for sterling, as cable pressures the overnight high, with offers seen placed into 1.5700-1.5705. A break here to allow for a move on toward 1.5720 ahead of 1.5740-1.5750 and 1.5765. Support seen back towards 1.5670 ahead of 1.5650 and 1.5637. Euro-sterling demand remains into 0.8020, more around recent lows at 0.8012 with stops placed on a break of 0.8000. Resistance 0.8040-0.8050.

Gold

Range: 1,626.35 – 1,630.84
Support: 1,617.30
Resistance: 1,630.14

Gold prices pinned in a narrow trading range so far. Prices have so far held around 1,626 to the downside before meeting some resistance on the session high of 1,630.59. Price action has been subdued ahead of the FOMC meeting, with many market participants on the sidelines. The FOMC are due to release a statement at the conclusion of its 2 day meeting on Wednesday, with the policy decision likely to influence the price of gold over the forthcoming sessions. Dips continue to be bought in the growing expectations that the Federal Reserve may initiate some additional QE or an extension of Operation Twist, which is due to expire at the end of June. Moderate support seen around 1,620-1,622. If the resistance barrier seen around 1,629-1,631 is cleared then prices may start heading towards the 1,658 area.