The financial market is being dominated by the two major topics on Monday: the “Greek issue” and the Chinese stock market. As a result, the market turned into a risk-off mode. The majority of the global stock markets have spent the day in the red zone, while the US Dollar index fell from 96.60. Watch the consumer confidence index in the US on Tuesday.
EUR/USD opened the day with a large bearish gap at 1.1000, but managed to close it during the day. Euro left the downbeat German CPI (-0.1% in June) with almost no attention. On Tuesday, watch the euro zone’s June CPI. The Greek question will stay on the center stage tomorrow: the indebted country has to pay 1.6 bln euros to the IMF tomorrow. Greece could face a technical default or get an extended aid program. High degree of uncertainty and nervousness persists. A negative scenario would let EUR/USD fix below 1.1050 and pave the ground to the next support at 1.0820. Resistance is now seen at 1.1230.
GBP/USD followed its European counterpart, recovering from 1.5660 to 1.5720. The pair is trading in a short-term sideways channel, we expect it to be broken to the downside. Resistance at 1.5760, 1.5800 and 1.5900. The cable is expected to stay below this area in the coming days. Our near-term bearish target is seen at 1.5550. As for the economic calendar, watch the UK current account, final GDP and the MPC’s Haldane speech on Tuesday.
As for the commodity block currencies, watch the NZD business confidence index and and the RBA Governor Stevens speech tomorrow. Despite the recent China’s National Bank rate cut, the commodity currencies remain at risk on the back of the Greek woes.
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