Euro unaffected by Greek deal or no deal!

Today's Highlights

Euro unaffected by Greek deal or no deal!

Minimal data leaves markets adrift

FX Market Overview

OOOOh there may be a deal in the offing between Greece and her creditors. But then again, we thought that yesterday before everyone got a bit aerated and walked away in a huff. I love watching negotiations in progress; such melodrama. Nevertheless, at the time of writing, the Euro has barely twitched, so the markets are clearly not convinced yet. I suspect this morning's Italian consumer confidence and the Eurozone money supply data will pass by the markets with barely a waft of interest.

And that's a bit of a shame because other than the University of Michigan consumer sentiment index, that is all the data we have for today. Thus, the markets will inevitably have to watch the shenanigans between the EU, EC, IMF and Greece for any clues on when or how to trade. I have covered some of the major currency pairs below but if you would like an update on anything I haven't covered, just email me and I will put something together for you.

Meanwhile, it's official; train companies are flipping awful. First Great Western, which is the only train company that stops at Castle Cary; the station nearest to Glastonbury, has banned muddy people from its trains. So stranded muddy people may be plentiful in the Glastonbury area on Sunday night. But at least First Great Western is running extra trains for the festival. During the London to Brighton bike ride, which raises millions for heart research, Southern Rail bans people with bikes. How community spirited of them. Have a great weekend even if you are muddy and I hope all the Glasto crowd get home in one piece.

Currency - GBP/Australian Dollar

The Australian Dollar continues to suffer from concern over commodity markets and the slowdown in the Aussie mining sector. There are also fears over interest rate cuts from the Reserve Bank of Australia and all of this is set against a backdrop of improving UK data. It is little wonder therefore that the Sterling – Australian Dollar exchange rate is still edging higher. The target of A$2.07 is within a stone's throw but this pair is looking over-cooked and we may well see some form of correction back to 2.00 before a final assault on the 2.07 level. This is a highly significant exchange rate though because it marks the 50% retracement of the fall from the 2008 high to the 2013 low. I seems fitting that the fall took 4 years and we are halfway back up the slope 2 years later.

Currency - GBP/Canadian Dollar

Having rallied from the C$1.77 low we saw at the start of the year to the current C$1.93 level, this Sterling – Canadian Dollar exchange rate looks puffed out. 1.94 appears to be a challenge for the Pound as it tries to gain against the Canadian Dollar but if Sterling can overcome the evident CAD buying interest at that level, we are likely to see a rapid sprint to C$2.00 and maybe even 2.02.

Currency - GBP/Euro

I don't think I am alone in being bemused by the resilience of the Euro in the face of a potential Greek default. The message this would send out to the likes of Spain and Portugal is a nasty one. They have been meeting austerity targets and making interest payments but may see Greece tear up that rule book and default with almost no ramifications. That isn't a good lesson for Eurozone members to learn and will create nervousness amongst traders; especially bond traders, in the years and months ahead if Greece is allowed to walk away from its debt. In the meantime, the Pound is struggling to make any headway above €1.40 but has GBP buyers lining up around €1.37 if and when that level is seen.

Currency - GBP/New Zealand Dollar

A few days ago it looked like the Sterling – NZ Dollar exchange rate was inevitably going to rally to NZ$2.42 and that may well still happen but traders have paused for thought. Hence this exchange rate has slipped down a few cents. Where next? is the question. The charts are suggesting we will see further rises in this exchange rate but the rise has been so swift that there is scope for some profit taking and a dip back to NZ$2.15 or thereabouts. Ultimately, as long as the UK economy keeps advancing and as long as the Reserve Bank of New Zealand keeps erring on the side of interest rate cuts, this pair should spike again but the timing of that spike is an open and unanswerable question at this stage.

Currency - GBP/US Dollar

Since the change of direction in April, the Sterling – US Dollar exchange rate has rallied from 1.45 to nigh on $1.60 and slipped again. There are very clear buying levels around $1.5250 and we may see the Pound slip back to there before any further gains. However, this is still a very low exchange rate in relation to the long term GBP-USD range, so there is plenty of scope for the pound to rally to higher realms. If we do get another bounce, look to buy USD before this rate touches $1.61 because that will be the trend line resistance at that time.