Investors will be looking for any notable pre-announcements that could shake the market further after several weeks of losses punctuated by disappointing economic data such as a recent uptick in the unemployment rate. If we get a spate of negative pre-announcements for the second quarter, this pullback we are in could turn into a full-blown correction. A psychological point that could help the market would be a sign of improvements in the financial situation in Greece. The country named a new finance minister on Friday, and Germany and France took steps to ensure the stability of the euro.
The Japanese Yen looks ahead to a volatile week as the currency’s lingering correlation with US Treasury bond yields and sensitivity to risk sentiment trends puts it squarely at the epicentre of major event risk. The pressure begins to mount over the weekend as Greek Prime Minister George Papandreou stands for a confidence vote and carries swiftly into Monday as EU finance ministers gather for a summit in Luxembourg in an attempt to lay the foundation for a fruitful meeting of the region’s heads of state on Friday. In the interim, the Federal Reserve is up to deliver its monetary policy announcement.
Today’s Important Economic Announcements (GMT)
8:00 AM EUR Current Account
9:00 AM GBP MPC Member Posen Speaks
5:00 PM CAD BOC Gov Carney Speaks
Forex & Commodities Technical Analysis
AUD/USD
As the Australian dollar pares the advance to 1.0714, the high-yielding currency may continue to lose ground in the week ahead should the central bank strike a balanced tone for future policy. During a speech earlier this week, Reserve Bank of Australian Governor Glenn Stevens warned that the marked appreciation in the exchange rate ‘is having significant effects’ on the economy, but went onto say that inflation is ‘more likely to rise than fall over the next couple of years’ as the region benefits from the expansion in global trade. As the AUD/USD continues to trade with a descending triangle, the technical developments certainly reinforce a bearish outlook for the Australian dollar, and we may see a sharp selloff in the days ahead.
Stop Loss: 1.0610
Take Profit: 1.0479
GBP/USD
Although the Sterling only lost a mere 0.2 percent on the week against its American counterpart, notably ending the week mixed against the major currencies, much of the sentiment surrounding the British currency continues to be negative. Data out of the United Kingdom the past week was exceptionally bleak, with industrial production and manufacturing data from April falling short of expectations, and consumer prices and producer prices data showing that inflation remains a significant concern for the economy. Clearly, the fundamentals are pointing down which means further lows are expected in the coming days.
Stop Loss: 1.6191
Take Profit: 1.6083
Natural Gas
Natural gas prices suffered their sharpest decline in June during last week. Natural gas spot price declined during the week by 7.58% and reached on Friday to $4.39 – the lowest price level in June. This drop is probably related to the change in temperatures in the US as the heat wave passed along with the high demand for electricity. The decline in crude oil prices during last week may have also contributed to the drop in natural gas prices seeing that natural gas is a commodity that is interchangeable (in certain areas) with crude oil. If you have been following our analysis, you surely know that prices are attracted to the psychologically strong price of $4.00. We could get to 4.21 in the next 24 hours.
Stop Loss: 4.44
Take Profit: 4.21
Published by www.SolidityBrokers.com
