The [B]EUR/USD [/B]currency pair is headed for further declines. The Greek Prime Minister Alexis Tsipras was unable to do a deal with the IMF and the EU creditors leaving the decision to the Greek nation by creating a national referendum on whether the country should stay in the Eurozone or leave it. The news has had a huge impact over the EUR/USD pair as the cross depreciated by more than 180 pips during the weekend. Our expectations are that the downtrend will continue towards the 1.05000 level, most likely the prices will break below and even head towards the level of parity.
The [B]GBP/USD[/B] currency pair has kept trading below the major horizontal resistance of 1.5800 and the price action suggests that further declines are likely to take place. Even though the major trend is still bullish we expect the prices to depreciate and go for a test of the horizontal support zone 1.5500. If we see a daily close below the major ascending trend line support, that could pull the prices even further towards the horizontal support level of 1.5175.
The [B]USD/CAD [/B]currency pair is traded right below a descending trend line resistance and we expect the major downtrend to be sustained. Our expectations are that the pair will depreciate towards the horizontal support level of 1.1930. However, in case we see the bulls breaking above 1.2500, the scenario could change and an uptrend might take place.
The [B]USD/JPY[/B] currency pair is still traded above the horizontal support level of 122.00. As long as the pair is traded above that level, we consider the scenario bullish. Moreover, on a daily basis we see that the prices are building a flag like structure that has a potential target around 130.00. We expect the pair to head towards 126.00 as a daily close above it would open the path towards 130.00. On the other hand, if we see the prices being traded below 122.00, the scenario turns bearish and further declines towards 118.50 should be expected.
[B]WEEK AHEAD: Greek Referendum, €1.6B Debt Repayment Default and US Non-Farm Payrolls Report![/B]
The last week market was driven mainly from Greek news, and the current week is extremely risky and volatile due to Greek updates. The Greek Prime Minister Alexis Tsipras announced on Saturday a [B]referendum on 5th of July[/B] to leave the Greek people decide if they will accept the EU new bailout terms and the austerity measures for more funds or not. Meanwhile, on Tuesday Greece need to pay €1.55 billion to IMF and the European Commission rejected the Greek PM request for an extension on the expiring rescue deal, setting the country to default on its debt payment to IMF on Tuesday, June 30. The EUR/USD pair opened down with a gap of 150 pips, currently traded at 1.1000 after closed on 1.1160 on Friday. Today, on Monday, the [B]Greek Banks remained closed[/B] and the most probable scenario is to remain closed the whole week until the referendum result is known. Furthermore, [B]Capital Control[/B] measures applied with the daily maximum amount of withdrawals be €60.
Furthermore, on the current week we have the Non-Farm Payrolls report from US scheduled on Thursday instead of Friday, as usual, due to Independence Day in US on Friday. The market expects the US economy to have created 232,000 jobs in June from 280,000 the month before. On Tuesday, Eurozone will release its Preliminary Inflation rate for June and on Thursday the ECB Monetary Policy Meeting Accounts will be published.
[B]Today[/B], in [B]Germany[/B], the country’s preliminary [B]Inflation rate[/B] for June is scheduled to be released. In US, the Pending Home Sales will complete the Housing market picture.
[B]Tomorrow[/B], we have important news out. In [B]Eurozone [/B]as a whole, the preliminary [B]Inflation Rate[/B] and the Unemployment Rate for June will be out. In Germany, the unemployment rate for June is expected. In Australia, the [B]RBA Governor Glenn Stevens[/B] will have a public speech. In [B]UK, the final GDP[/B] and the Total Business Investment for the first quarter will be released.
The [B]Canada’s GDP [/B]will also be released. In US, the Consumer Confidence, the Purchasing Managers’ index for June and the Case-Shiller Home Price Indices for April will be announced.
[B]Wednesday [/B]is a bank holiday in Canada. In Europe, we start the day with June’s Markit Manufacturing PMIs for Germany, UK, France, Italy, Greece and Eurozone as a whole along with the BoE Financial Stability Report. A while later, the traders’ attention will be turned in US where important [B]labour indicators[/B] are expected the day before the NFP report as well as the ISM and Markit Manufacturing PMI for June.
On [B]Thursday[/B], ECB will publish the Monetary Policy Meeting Accounts. In US, the [B]NFP report[/B] will be out, with headline the number of jobs added in both the public and private sector, in June. The Report will be eyed from the investors as it is one of the main data Fed will take into account to raise its Interest rates. The market forecasted the US economy to have added 232,000 jobs, below the last month’s number of 280,000. The number is also very strong despite the small expected decline. The[B] Unemployment Rate[/B] is expected to drop further to 5.4%. The Average Hourly Earnings projected to have increased by 0.2%, a smaller pace than May’s 0.3% increase.
On [B]Friday[/B], is a [B][B]bank holiday in the US [/B][/B]due to Independence Day, thus there are not economic news scheduled from US. In Europe, the Markit Services and Composite PMIs for Germany, UK, France, Italy, and Eurozone as a whole for June will be out as well as Eurozone’s Retail Sales for May.