Forex News

G10 Currencies EUR: “Soft restructuring“, “re-profiling“ – since the Eurogroup meeting last week the head of the Eurogroup Jean-Claude Juncker and EU Commissioner Olli Rehn have been suggesting repeatedly that there will be a restructuring of Greek debt.

– AUD, KRW and MYR lead weakness vs USD, EURUSD back below 1.41 – We remain bullish euro despite data headwinds – US data this week likely to be mixed with risks to the downside

Today’s highlights: EUR/USD: Plunge back from head fake above 1.4341 leaves risk through key 1.4038/20 to negate basing effort.  Risk then to 1.3655 into June

Overnight equity markets Nikkei          -1.52%          9’460.63 S&P500          -0.77%          1’333.27 Dow             -0.74%          12’512.04 Nasdaq          -0.71%          2’803.32

HK wrap from G10 trader Fridays risk off move continued in Asia from the outset as Noyer comments early in our session set the tone and sent EUR through 141.00. HSBC’s FLASH PMI for China  came in soft and added to the aversion theme.

Foreign Exchange EUR/USD – focus on the 200 week ma at 1.4000. Targets 1.3370 then 1.3463/1.3390. The US dollar index is approaching channel resistance at 76.80 GBP/USD – Targets one year uptrend at 1.6080.USD/SEK has based – Previous 11 month downtrend now acting support – maintain positive bias.

Eurozone worries continues with Spain/Germany 10y spread breaking wider (also 10y Spanish Bono’s on the verge of exiting a triangle for higher yield). EUR/USD ended its upward correction with a key day reversal => next important target area = 1.3450/3600.

Trades of the week In FX space we are once again looking at RUB following the recent rebound against USD.  Positioning has been recently cleared with long positions coming down to an 11-month low, while the upcoming round of tax payments (RUB50bn-RUB75bn in profits tax due on Mon,  RUB150bn in excise and MPT taxes on […]

Weighing the costs of (not) helping Greece? We expect the tensions and the elevated volatility in peripheral spreads to prevail until a new comprehensive deal for Greece is presented. 

EUR/USD spent last week attempting to correct higher but has failed to make any impression on overhead resistance. Intraday rallies will find resistance at 1.4340/46 and should now remain capped by 1.4425/65, while below here the market will remain directly offered.

Bundesbank President Jens Weidmann and rating agency Fitch have warned of a restructuring of existing GGBs.