Market focus was back on Greece today, but yet again the headaches continued as expected. While all that was happening there was some economic data in the Euro zone as German IFO business climate data came in at 107.4. A slight drop on the last two months readings, but still robust compared to what it has been in the past. The Euro as a result saw some resilience and managed to claw back some ground against the USD in trading today, lifting to 1.1202 before struggling to find further momentum past resistance.
The DAX on the back of the weaker IFO data and Greek headaches saw a strong sell-off. Plunging down past 11400 support level before finding some composure and pulling back up the charts. It's likely that the knee-jerk reaction I talked about certainly happened today, and many are still expecting Greece to find some sort of 11th hour deal in order to stave off bankruptcy. Going forward I would still be watching the 11647 resistance level as it's likely any push through would signal the bulls pushing forward and we may have quite a few limit orders stacked here in case of a Greek deal at present.
Oil (WTI) was also a major draw card for the markets today as crude oil inventory data came out from the EIA showing a drop of -4.93M barrels. This was a stronger result than the expected -2.05M and shows the market is still tapering off that oversupply that was previously a problem. It also led to further consolidation of oil altogether, and a strong pennant pattern (D1) is now forming on the charts leading to a range of technical plays for traders.
The Dollar Index saw some movement on the charts as final GDP q/q came in at 0.2% as expected. This was not unexpected for the US markets, as we had seen a slight slowdown and a more dovish tone from the FED, as they anticipated the market struggling during the previous quarter. However, forecasts are pointing to a pickup in the US economy, if there are no economic shocks globally.
Aussie bulls will be touching wood this evening as the AUDUSD plunged down touching the current bullish trend line. They will be particularly focused on the job vacancies due out shortly, which many will be hopeful are better than the most recent results from April which showed a reduction to 0.8%. Either way pressure on the trend line is a real possibility and a breakdown here could signal further drops pushing down support at 0.7640
The high flying Kiwi which has not been flying very well lately has managed to claw back some ground on the charts, and is likely to be affected by Aussie dollar movements later in the day. In addition to the Aussie economic data due out later, we can expect some decent data for New Zealand as trade balance data is due out near the end of tomorrow. While a recent rate cut from the RBNZ has certainly helped to soften the blow in New Zealand, the drop in the exchange rate won't be factored into this data, and so we should expect to see the trade balance swing back into deficit.
Following up the NZ economic data will be Japanese data which is quite some time off still. However, the CPI data is certainly worth noting in your calendar as a miss of the target can prompt comments from Kuroda or Shinzo Abe, which in turn can lead to strong selling of the Yen generally. Something to keep in your mind when looking at trading the Yen in the coming trading session.
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