It was D-day for the markets today as they fretted heavily over the Greek situation and the possibility of contagion. So far there seems to be a large amount of unknowns and this is leading to large swings across equities and the Euro itself.
The US session for the most part was overshadowed by the Greek show as it continues to dominate headlines. However, it's been relatively upbeat for the most part, for the US economy, as CB consumer confidence was up to 101.4, a much better reading than the previous months 95.4. This in turn helped to boost the dollar index slightly higher to 95.695, where we had a brief touch on resistance at 95.855. I would be very careful playing with euro/gbp/chf/dollar pairs in the coming 24 hours, as we are still likely to see big swings on the market as Greece is expected to default tomorrow morning, or find a saviour. So all bets are off the table as to what might happen regarding dollar pairs, and the dollar index itself.
The Yen has seen some strong moves in the last few days, especially against a strong USD where it has shown strong buying across the board. I would expect this to continue, but the markets are still focused on key levels. Support at 122.394 for the USDJPY has so far remained very strong, but continues to be tested and is unlikely to see off further pressure at this stage as we are seeing lower lows. EURJPY also continues to look likely to play off support at 135.020 and this could be one to watch during the early Asian session.
Dax futures have seen another day of heavy volatility. It's likely tomorrow is going to be another cracker, and we could see massive swings as news is digested over the course of the day. Certainly support has held up at 10884. Ff we see a Greek exit we could see this level taken out and further falls to at least 10594. On the flip side if we see a positive result we could see a strong rally in the Dax index.
If you were a kiwi bull you were once again disappointed today as ANZ business confidence came in at -2.3; the first time in 4 years that it has dropped into the negative. In turn the NZDUSD dropped sharply - as combined with this disappointing result, markets looked to rid themselves of risky assets and the kiwi was high on their priority list. The market is now looking for support at 0.6700 and we could certainly see a drop down to here if Chinese manufacturing data disappoints the market.
The Aussie dollar has surprised everyone with its strong rally today and many will be focused on the outcome of the early Asia trading session, as we are in for a packed day of data. Australian building approvals will be closely watched as Australian data has so far been hit and miss. On top of all of this will be the Chinese data which will be closely watched. It's likely the markets will be quite nervous after strong drops in the Shanghai index, so traders will be looking for some positive data to justify further extensions in the Australian dollar. Right now the AUDUSD has paused on the 0.770 resistance level and it's likely we won't see any further pressure on this level until we see Chinese data results come out today.
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