Analysis by: Pepperstone
U.S. Dollar. Our bias BEARISH, we’ll be looking to sell on rallies.
• Dollar finished sharply lower on Friday against its key counterparts on Bernanke congressional testimony & U.S. government credit rating fears
• U.S. debt ceiling debate grabbing the major headlines at the moment
• Fed’s next steps will depend on U.S. economic data going forward
• Support at 9,500, resistance 9,700
• We remain bearish the Greenback in the week ahead and are looking to sell on rallies.
Euro. Our bias NEUTRAL, on the sidelines till a clearer picture develops.
• Last week, EURUSD ranged a turbulent 440 points following headlines that included Italian debt contagion fears, Fed Chairman Bernankes congressional testimony, Moodys/S & Ps’ announcement to downgrade the U.S. government credit rating to “credit negative” and Irelands credit rating slashed to “junk status”.
• Key Euro eco data this week includes Tuesdays German ZEW Economic Sentiment survey, PMI reports on Thursday and Fridays German Ifo Business Climate report.
• Speculation gathering pace that Euro could replace Greenback as the worlds most liquid alternative currency
• Support at 1.4050, resistance at 1.4300
• Confused price action of late has us on the sidelines until a clearer picture emerges and as such we remain Euro neutral in the week ahead
Japanese Yen. Our bias NEUTRAL, on the sidelines till a clearer picture develops.
• Yen advanced more than 2% against the U.S. Dollar by last Fridays close
• Yen strength came on the back of safe-haven flows accelerated by concerns over sovereign debt downgrades and the threat of defaults in Europe
• June merchandise trade balance figures & May all industry activity index reports due this week
• Support at 78.50, resistance 80.00
• We remain Yen neutral in the week ahead until a clearer picture emerges regarding risk sentiment.
British Pound. Our bias BEARISH, we’ll be looking to sell on rallies.
• Sterling found strong support against the U.S. Dollar in the latter half of last week
• Sterling could come under heavy pressure in the coming weeks
• MPC minutes (dovish outcome expected) & retail sales due this week
• Support at 1.6000, resistance at 1.6200
• We remain bearish Sterling in the week ahead and are looking to sell on rallies.
Canadian Dollar. Our bias BULLISH, we’ll be looking to buy on dips.
• Canadian Dollar closed on Friday at 0.9529 against the U.S. Dollar and Loonie strength may accelerate this week
• Credit Suisse Overnight Index swaps see borrowing costs increasing by nearly 50bp over the next 12 months
• BoC rate decision, CPI & retail sales due this week
• Support at 0.9450, resistance 0.9585
• We remain Loonie bullish in the week ahead and are looking to buy on dips (rallies in the case of USDCAD).
Australian Dollar. Our bias NEUTRAL, on the sidelines till a clearer picture develops.
• Last Fridays close saw the Australian Dollar down against every major currency
• Last week, Westpac released report suggesting that the RBA would need to cuts the benchmark rate in the coming months in order to boost growth in non-mining sectors which have struggled in recent months
• RBA policy meeting minutes & NAB quarterly business confidence survey due this week
• Support at 1.0550, resistance 1.0800
• A confused picture heading into this week has us on the sidelines for now, remaining Aussie neutral until a clearer picture emerges regarding risk sentiment.
New Zealand Dollar. Our bias BULLISH, we’ll be looking to buy on dips.
• New Zealand Dollar advanced more than 0.85% last week against the U.S. Dollar hitting record highs just above 0.8500 level
• Concerns over Australian economy cooling may weigh on Kiwi
• 2Q CPI print due Sunday
• Support at 0.8280, resistance n/a
• We remain Kiwi bullish in the week ahead and are looking to buy on dips.
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