The greenback ended the week nearly 0.06% higher against the euro on Friday, following a negative 0.20% on Thursday, meanwhile, this was the fourth consecutive negative week for the dollar. Last week the euro came under pressure below the 1.1400 after the Greeks withdrew more than €4.0 billion from their banking system.
The [B]EUR/USD[/B] managed to remain above the key support level of 1.1150 as well as above the 1.1280 levels, despite the rising tensions between Greece and its creditors last week. The latter is a significant level since it coincides with the 50-period SMA on the 4-hour chart. A break of these obstacles will suggest that the correction is completed and this should open the door towards the 1.1150 level. On the upside, the 200-period SMA is ready to provide a significant resistance to the price action near the key resistance level of 1.1470. A break above this would be very bullish, initially prompting a move towards the 1.1520 and then to 1.1580.
Nothing can stop the pound bulls for reaching 1.6050, as the price is receiving a strong support from both, the 50-period SMA and the 200-period SMA, as well as the ascending trendline which started back in mid-April. In addition, the 38.2%, as well as the 50% Fibonacci levels, are coincide with the 1.5550 and the 1.5900 levels, all ready to provide a significant support to the price in case of a pullback. Alternatively, if the [B]GBP/USD[/B] pair begins to edge lower, having failed to break above the 1.5930, it should find support around the psychological level of 1.5800, previous level of support.
The dollar was unable to sustain itself against the yen above its support level of 124.00 and has come under extreme duress. It has also fallen below the key support level of 123.30 which coincides with the 50-period SMA on the 4-hour chart and is now approaching the psychological level of 122.00. As it stands I would expect the [B]USD/JPY[/B] to test the psychological level of 122.00, which includes the 200-period SMA on the 4-hour chart, in the next couple of days. The spotlight in the Asia-Pacific region will be on Japan this week, where the release of key economic indicators will shed some light on the recent JPY depreciation. On Tuesday, the Bank of Japan will release its Monetary Policy Meeting Minutes, while on Thursday, Japan will release the CPI and Unemployment Rate, both for May.
The [B]USD/CAD[/B] moved lower the last couple of weeks while remaining below the short-term descending trend line which started back in early-June. This downward move can be translated as a technical correction of the trend in the long-term. Having a look on the 4-hour chart, the pair managed to rebound from the strong support level of 1.2125 and moved higher breaking above the psychological support level of 1.2200, however, the upward advance was halted by the strong support level of 1.2260, which coincides with both, the 50-period SMA and the 200-period SMA. If the bulls manage to win the battle around that area, then we could see a further pressure on the 1.2360 level, a key resistance level. On the other hand, a break below the psychological level of 1.2200 should open the door for a further retracement towards the 1.2125 level and then to 1.2100.
The [B]AUD/USD [/B]pair has been looking more bullish over the last couple of weeks, but I am not yet convinced that the downtrend is over. The pair ran into a strong resistance around 0.7800 and more recently from the 0.7820 barrier, which includes the 200-period SMA on the 4-hour chart, however, it failed to sustain its recent gains as a result to come back below both, the 0.7820 and 0.7800 levels. The pair this morning pushed above a key level of resistance at 0.7760, following the strong rebound from the 50-period SMA on the 4-hour chart and the 200-period SMA on the 1-hour chart, near the 0.7735 level. This is very significant development for the pair, and if the buying pressure continues then I would expect the pair to test the 0.7800 barrier and then the 0.7850 level. Alternatively, given how aggressive the rally has been over the last few days, we could see a brief period of consolidation between the 0.7850 and 0.7650 levels.
[B]WEEK AHEAD: The most important news that will affect the market[/B]
The week ahead starts with the crucial Eurogroup meeting along with the EU leaders special summit. The rest of the week is looking a little quieter in the markets, especially compared to the one just gone, according to the schedule news. The Market driving news are few and are coming from US. The Durable Goods Orders and final GDP for the first quarter. In Eurozone, various news regarding consumer spending and confidence are expected.
[B]Today [/B]looks a long day for Greece as the crucial [B]Eurogroup meeting[/B] along with the EU leaders special summit is scheduled. The Greek banking system suffers from 4.2 billion euros that leaked out during the last week, however, despite the rumours, Greek banks opened today with limited liquidity. Greece has a repayment due to IMF of 1.6 billion euros. The Greek Prime minister represented a new bailout plan to avert default. In US, we have news from the housing sector. The Existing Home Sales for May are expected. In Eurozone, the Preliminary Consumer Confidence for June is forecasted to decrease slightly to -5.8 from -5.5 before. The confidence in Eurozone is below zero for the last 14 years!
On [B]Tuesday [/B]morning, the Markit Services, Manufacturing and Composite PMIs in June for Eurozone, Germany and France. In US, the[B] Durable Goods Orders[/B] will attract considerable attention. The Preliminary Markit Manufacturing for US will also be released as well as various indicators for the housing sector. Later in the night, Bank of Japan will release its Monetary Policy Meeting Minutes.
On [B]Wednesday[/B], IFO Surveys for Business Climate, Current Assessment and Expectations are expected. In UK, the [B]Financial Stability Report[/B] will be out and the BBA Mortgage Approvals. The highlight of the day will be the [B]US Gross Domestic Product[/B] as the preliminary figure showed that the economy contracted in the first quarter of the year while it was expanded by 3.9% on average the three previous quarters.
On [B]Thursday[/B], the weekly US Jobless Claims report are scheduled as usual. More indicators for Personal Spending and Consumer consumption, an important sector for the economy growth will be released as the preliminary Markit Services and Composite PMIs for June. Later in the day, in Japan the CPI and the Unemployment Rate for May will be published.
The week is scheduled to close quietly as on [B]Friday [/B]the only noteworthy indicator is Germany’s Inflation Rate. In Eurozone, the M3 Money Supply and the Private Loans for May are expected. In US, the University of Michigan will release the final Consumer Sentiment Index for May.