Good morning everyone. We’ve had a few “no forecasts” days at the end of last week to allow the market to get back into momentum. Today I’m expecting the US Dollar to strength throughout the day. Expect decent sized retracements. I will be adding USDCHF to the hedged pairs to offset the trading risk.
Currency Outlook
Short : EURUSD
Today we’re expecting the EURUSD to proceed Short below the barrier levels of 1.41723 and 1.41320.
Fundamental Watch
- FOMC Member Kocherlakota Speaks
* Euro hits onemonth high vs USD after hitting stops
* Greece secures emergency loans
* Hawkish ECB seen supporting euro this week
* Aussie dips on weak retail sales data
SYDNEY, July 4 The euro hit a onemonth high against the dollar on Monday supported by diminishing worries about Greece, with stoploss buying helping the single currency add to the hefty gains made over the past week.
The euro extended its rise in the wake of its breach of an option barrier near $1.4550 late last week, and climbed to as high as $1.4580 on trading platform EBS, its highest since early June.
Euro zone finance ministers on Saturday approved a 12 billion euro instalment of Greece’s bailout and said details of a second aid package for Athens would be finalised by midSeptember.
With the average stock in the index down 2.57% so far this month, May has not been kind to the S&P 500. We ran our decile analysis on the index to see which stock characteristics have led the market lower.
To run the analysis, we break the S&P 500 into deciles based on various stock characteristics and then calculate the average performance of the stocks in each decile since 4/29. Below is a matrix highlighting the results of the analysis.
Continue reading… ;” href=”http://bespokepremium.com/”>Bespoke Premium member to view.)
USDCAD Analysis. After touching the trend line from 0.9513 to 0.9655, USDCAD rebounded from 0.9712, suggesting that a cycle bottom is being formed on 4-hour chart. Further rise towards 0.9851 is expected later today, a break above this level will confirm that the uptrend from 0.9444 has resumed, then next target would be at 0.9900 zone. Only break below 0.9712 could indicate that lengthier consolidation of uptrend is underway, then the pair will find support at 0.9650 area.
USDJPY Analysis. USDJPY is forming a cycle bottom at 79.69 on 4-hour chart. Further rally could be expected later today, and target would be at the upper border of the price channel.
Riskier asset in the capital markets improved during the past week as investors were able to breathe a sigh of relief after the Greek parliament passed a vote on austerity to pave the way for further financing for the EU/IMF.
Europe
One hurdle has been cleared but a few more remains before the markets can signal a more lasting ceasefire on Greece. The market seem to be implying that the worst potential outcome appears to have been averted as the implementation vote on the austerity measures were merely a formality. Looking forward the next big issue that needs to be addressed is the private sector involvement in the next bailout package for Greece. The crux of which will be the plans for some form of debt rollover plan.
The French proposal is gaining some traction as recent news reports suggest that German banks and insurers are said to have agreed to draft proposal on Greek debt rollover, the plan itself still remains open to whether rating agencies view it as a credit event. While the role of private sector participation still needs to be worked out to approve a medium-term financing package, policy makers have likely gravitated towards solutions that limit the spread of contagion. Mean