Spain nationalises Bankia as Greece is unable to form a government

EUR/USD
Range: 1.2929 – 1.2963
Support: 1.2892
Resistance: 1.2985

Euro-dollar closed in New York at 1.2927 following a roller coaster session which saw the rate hit lows of 1.2912, recovering to 1.2978 before dropping back to 1.2925 ahead of the close. Moves were mainly dictated by market reaction to stories concerning Greek debt going forward and Spanish bank concerns. There’s early pressure on euro-sterling, targeting the barrier at 0.8000, reaching a low of 0.8001 and in turn taking euro-dollar to lows of 1.2924. The rate bounced back but met resistance above 1.2950, the recovery faltering at 1.2957 before meeting headwind sales from euro-Aussie sales following the release of better-than-expected Australian jobs data. Support is now holding at 1.2892 and 1.2856, with resistance eyed up at 1.2985 and 1.3006.

GBP/USD
Range: 1.6124 – 1.6150
Support: 1.6124
Resistance: 1.6150

Euro-sterling came under pressure during Asian trade as the 0.8000 barrier was targeted. The rate posted fresh 42-month lows at 0.8001 before recovering. This move acted to take cable from an early pullback low of 1.6128 to session highs of 1.6151. The recovery in the cross back to its opening levels around 0.8020 allowed cable to slowly step down to session lows of 1.6124 before settling back between 1.6135/45. The UK is seen taking centre stage this morning, with the release of UK IP/manufacturing preceding the focal BOE MPC rate decision. Most expect rates/QE to remain unchanged. There is expected to be an accompanying comment on QE following the end of the recent QE cycle. Cable offers remain in place between 1.6150-1.6160, a break to open a move towards 1.6180-1.6185 ahead of 1.6200. Support at 1.6124, ahead of 1.6110-1.6100 and 1.6088.

Gold
Range: 1,587.18 – 1,595.35
Support: 1,591.01
Resistance: 1,600.59

Gold prices are trading around unchanged levels, with the market consolidating a little after three consecutive down sessions prices held around 1,580.00 yesterday, a key level. Gold has been range-bound for much of the Asian session, edging its way back higher with a slight improvement showing from the euro and Aussie-Dollar. 1,588.80 has so far held on the downside, with prices near their best levels at 1,594.80 – a fraction above yesterday’s close of 1,594.60. Despite the small bounce, sentiment remains fragile with investors still concerned about the political deadlock in Greece and the problems that exist within Spain’s banking sector. Gold prices may still struggle to make any headway, with prices needing to get back above 1,625.00 for some confidence to return to the long side. 1,580.00 remains the level to watch on the downside.