Greece fears pound across the board with hefty declines in the Euro, Equities, and Oil. The Euro had the largest 1 day slump since 2009, and the inverse effect on the US dollar pressured commodities into a sea of red. Crude oil slid more than 4% as the spread between WTI/Brent tightened as July Brent went off the board yesterday. There are legitimate fears about Greece. It’s not unsolvable but it needs more imagination than European leaders are showing now. The S&P is projecting a test of 1240 for roughly a 10% correction off the 1370 top.
The Euro will ultimately test 1.4050 then may get a short-lived bounce before trading under 1.40.We’re in the midst of this mushy economic data that is not likely to turn around anytime soon. Ahead of Wall Street’s start, stock-index futures slid. That echoed moves in European equities as finance ministers meeting in Brussels failed to reach agreement on Greece’s financial crisis. Greece’s opposition party reportedly asked Prime Minister George Papandreou to resign amid a 24-hour general strike to protest new austerity measures.
Today’s Important Economic Announcements (GMT)
7:15 AM CHF Industrial Production q/q
7:30 AM CHF Libor Rate & SNB Monetary Policy Assessment
8:00 AM EUR ECB Monthly Bulletin
8:30 AM GBP Retail Sales m/m
9:00 AM EUR CPI y/y
12:30 PM USD Building Permits & Unemployment Claims
2:00 PM USD Philly Fed Manufacturing Index
2:30 PM Natural Gas Natural Gas Storage
5:10 PM USD FOMC Member Fisher Speaks
Forex & Commodities Technical Analysis
EUR/USD
The dollar is stronger across the board as the Greek debt crisis comes to a head with the failure of European finance ministers to come to an agreement for a second bailout package. Moody’s put three French banks on credit watch which compounded the negativity as the majors were all sold versus the USD. The Euro continues to be the currency to sell and just had a sudden strong burst to the downside, after Mr. Wellink, a member of the European Bank Governing Council and member of the Financial Stability Board (FSB) said European aid fund may have to be doubled. We could encounter support at 1.4150.
Stop Loss: 1.4219
Take Profit: 1.4150
Crude Oil
Crude oil futures edged back up in electronic trading Thursday, supported by a weaker dollar, while investors awaited fresh developments in Greece’s sovereign debt-crisis. Oil for July delivery gained 69 cents to $95.50 a barrel on the New York Mercantile Exchange during Asian trading hours. Crude suffered its biggest one-day drop since May 11 earlier in the North American session, shedding nearly 5% as fresh Greek debt fears and weak U.S. economic data rattled global markets. We forecast oil will hold around $95 a barrel in the short term, and could move as low as $92 over the next few days.
Stop Loss: 95.75
Take Profit: 92.90
AUD/NZD
AUD/NZD has been one of the strongest performers, so far recovering all of last week’s losses. The par opened the week at 1.2837 and has advanced into the 1.3170 zone this Thursday. At the time of writing, the pair is quoted in the 1.3150 price zone, nearly 45 pips above its starting price. If the pair continues its ascent into higher levels, resistance may be found at 1.3185. To the downside, support levels lie at, 1.3130. The pair looks like it is slightly bullish, but it must be said that 1.32 is now coming into play as a final line in the sand for bears. If we can break above there, we will have a bullish market again.
Stop Loss: 1.3078
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