- US markets closed for Independence day holiday.
- Investors cautious ahead of Greek referendum on July 5.
- ‘Yes’ camp takes slim lead in Greek bailout referendum.
- GBP gets a boost from PMI data, up to 1.5649 from 1.5603.
- AUD/USD makes fresh 6 year low at 0.7527 levels.
- EUR/USD trading in between 1.1082 to1.1119 levels, mild bid bias.
- USD Index down to 95.899 from 4 week 96.422 peak Thursday.
- Euro Zone May Retail Sales 0.2% m/m, 2.4% y/y vs previous 0.7%/2.7% revised. 0.1%/2.3% expected.
- Euro Zone June Markit Service final PMI 54.4 vs previous 54.4/ 54.4 expected.
- Euro Zone June Markit Composite final PMI 54.2 vs previous 54.1. 54.1 expected.
- UK June Markit/CIPS Service PMI 58.5 vs previous 56.5. 57.4 expected.
- BOE- Depositor protection in UK banks to be cut to 75,000 pounds from 85,000 pounds as of December 31.
- BOE depositors with “temporary high balances” will be covered up to 1 mln Sterling for 6 months.
- No US or Canadian data today.
Key Events Ahead
- No event and speech is schedule due to US Holiday for Independence Day.
FX Recap
EUR/USD is supported above 1.1100 levels and currently trading at 1.1115 levels. It has made intraday high at 1.1116 and low at 1.1078 levels. The dollar slipped against a basket of currencies on Friday, hurt by softer than expected U.S. employment data and with most investors staying on the sidelines before Greece’s referendum on bailout conditions during the weekend. The dollar index was down 0.15 percent at 95.977, retreating from a 4-week high of 96.422 hit earlier in the day. Against the yen, the dollar was trading at 123.03 yen, flat on the day. The euro edged up 0.15 percent to $1.1105. Tsipras said that he is still open to a compromise in order to end any talk of Greece leaving the Euro zone. He assured Greece is seeking a sustainable deal and a solution that will keep them in the Euro zone. Pair remained steady in the band of 1.1080-1.1115 even though the Euro zone retail consumption in June has rose more than expected. Consumer spending at retailers ticked only 0.2% higher in the fifth month of the year on a month-on-month basis. The uncertainty surrounding the referendum overshadowed the uptick in the Euro zone private sector activity and the better-than-expected Euro zone June retail sales (actual 0.2%, expected 0.1%). Initial support is seen around 1.0952 and resistance is seen around 1.1218 levels. Option expiries are at 1.1000 (746M), 1.1040-45 (480M), 1.1100 (479M), 1.1150-55 (1.1BLN).USD/JPY is supported around 123.00 levels and posted a high of 123.17 levels. It has made intraday low at 122.80 and currently trading at 122.90 levels. The US dollar struggles for an upper edge over the Japanese currency in the mid-Asian session, with USD/JPY swinging back around 123 handle. The major erased losses and trades flat as traders moved past NFP release and now await Sunday’s Greek bailout referendum. The pair extends its recovery amid low volumes as US markets remain closed today on an Independent Day holiday. Near term resistance is seen at 124.57 and support is seen at 121.48 levels. Option expiries are at 122.15 (502M), 122.50 (920M), 124.00 (585M).GBP/USD is supported above $1.5600 levels. It made an intraday high at 1.5637 and low at 1.5601 levels. Pair is currently trading at 1.5634 levels. Britain’s service sector recovered from its steepest slowdown in nearly four years in June, a private survey showed on Friday, and exceeding estimates. Markit services purchasing managers’ index (PMI) booked 58.5 during the sixth month of the year, compared to the 56.5 in May. Markets now shift their focus towards Greek bailout referendum. Greeks will vote on Sunday, July 5 whether to accept or reject the latest offer by creditors to the Tsipras government aimed at unfreezing €7.2 billion in remaining bailout funds. The Greek vote is expected to spur volatility in to Monday’s trading. Initial support is seen at 1.5565 and resistance is seen around 1.5737 levels.USDCHF is supported above 0.9400 levels and trading at 0.9412 levels and made intraday low at 0.9406 and high at 0.9437 levels. CHF is gradually appreciating after the unfavourable US NFP job data and factory orders. As US markets remain closed today on account of Independence Day holiday, movement will be limited. Near term support is seen at 0.9341 levels and resistance is seen at 0.9500 levels.AUD/USD is supported below 0.7600 levels and trading at 0.7528 levels. It has made intraday high at 0.7647 levels and low at 0.7526 levels. The Australian dollar was heavily sold-off across the board in Asia after Australia’s May retail sales missed expectations while the April revision also discouraged markets. Australia’s May retail sales came below expectations at +0.3% versus +0.5% market estimates, with last month’s data also revised lower to -0.1% versus 0%. The trading volume is expected to be muted as US market will be closed today in observance of the Independence Day holiday. Markets sentiment will be driven mainly by next week’s economic news from Australia as the RBA’s cash rate decision is scheduled on Tuesday while labour data report for June is due on Thursday. Initial support is seen at 0.7532 and resistance at 0.7738 levels.
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