EUR/USD crashes as Greece rejects deal

Technical Analysis

EUR/USD crashes as Greece rejects deal

“It looks like a bit of stability has returned after the earlier onslaught, so I'd say there was a bit of profit-taking, given that we are very much in a state of flux.”

- RBC Capital Markets (based on Reuters)

• Pair’s Outlook

  EUR/USD collapsed in the morning on Monday, overshadowing developments that took place before the weekend on Friday, as Greece rejected the deal, called a referendum and imposed capital controls on banks. The pair's began trading just above 1.10 today, down 160 pips from Friday. From the perspective of the technical analysis, while the Euro remains below monthly PP at 1.1089, the outlook will remain strongly negative for the short-term.

• Traders’ Sentiment

  The share of long open positions at the SWFX market increased by one percentage point over the weekend, up from 44% to 45%. Meanwhile, pending orders to buy the Euro against the Dollar in 100-pip range from the spot surged 12% to 52%.

GBP/USD aims to retake the 1.57 major level

“The [May] surveys point to [UK] GDP growing at a quarterly rate of just 0.4% in May, raising doubts about the ability of the economy to rebound convincingly from the weakness seen at the start of the year.”

- Markit (based on WBP Online)

• Pair’s Outlook

  The Cable remained relatively unchanged last Friday, despite better-than-expected fundamental data. Nevertheless, the Sterling is still likely to outperform the US Dollar today. A strong resistance area rests near the open price, represented by the 1.57 psychological level and the monthly R1. If the GBP/USD receives enough boost, we should see a rally towards the weekly PP at 1.5753. Meanwhile, technical indicators retain their strong bullish signals in the daily and weekly timeframes.

• Traders’ Sentiment

  Market sentiment has reached a perfect equilibrium today. At the same time, the number of orders to acquire the British Pound edged up from 56 to 62%.

USD/JPY in tight range between 122 and 123

“With little to chew on pending further headlines, USD-JPY may falter on fresh upticks in the interim within a 122.45-124.90 range. Any potential nervousness with respect to Greece may also be expected to manifest via the JPY-crosses, keeping USD-JPY capped.”

- OCBC Bank (based on FX Street)

• Pair’s Outlook

  On Friday, upon reaching the weekly PP at 123.23, the USD/JPY managed to rebound. As a result, the US Dollar surged up to the 124 major level, but was unable to pierce through, as the weekly R1 was bolstering the area. Today the pair opened significantly lower, namely at 122.60, with risks of falling deeper down to 122. However, weakened Asian currencies might give room for the Buck to advance and retake the 123 psychological level. Technical studies are showing mixed signs, unable to confirm either scenario.

• Traders’ Sentiment

  Both net positions and net orders improved. Today 73% of traders are long the Greenback (previously 63%), whereas the share of purchase orders increased from 65 to 78%.

XAU/USD back above 2013 low amid Greece

“Risk-off sentiment hit the market this morning following the news out of Greece over the weekend, sending gold higher on the open.”

- MKS Group (based on CNBC)

• Pair’s Outlook

  There has been a moderate move to the upside by the bullion on Friday, following four consecutive days of losses that pushed the price of gold below the 2013 low, down to 1,168. However, on Monday the precious metal is rebounding noticeably, following events in Greece. It has already rebounded above the mentioned two-year low and weekly PP to trade at 1,184. The short-term outlook is likely to stay bullish, even though the daily technical indicators are neutral. The nearest resistance is in turn located at 1,192 (55-day SMA).

• Traders’ Sentiment

  The total share of long open trades at the SWFX market remains solid at 72%, while bears are in the well-pronounced minority with just 28% of all trades. Bullish sentiment on the market gained one extra percentage point over the weekend.