OVERVIEW => As we expected, the Greek “no” vote has not made the FX picture any clearer. Moreover, the now higher probability of a Grexit increased uncertainty, made market participant reduce their positioning and lastly made US yields move lower, causing the rate differential Europe vs US to move in favour of the Euro. We play tactically with our main positioning on short CA and AUD.
{EU} EURUSD Neutral => Eurozone leaders will meet today to discuss the Greek referendum, and we expect the pair to trade rangebound on headlines. The ECB tightened up collateral rules for the ELA but so far that seems to have had a limited impact. For now the desk prefers to stay light and reactive until we get out of the headline-driven markets we’re in currently. Key levels for the session: support at 1.0950 (double bottom on Monday and o/n) and resistance at 1.1110 (yday’s high at 1.1096).
{JN} USDJPY Neutral => We stay neutral on the pair as the headline tennis is likely to lead risk sentiment from here. The next catalysts are the FOMC minutes on Wednesday evening that may give a more balanced view of the dovish FOMC June meeting. Key levels for the session: support comes in 122.20 and then 121.60/70 – resistance 122.80/90 (yday’s high at 122.93) and then 123.20/30.
{GB} GBPUSD Neutral => We stay neutral on the pair with key levels for the session: support at 1.5510 with resistance at 1.5640.
{NZ} NZDUSD Neutral => We are now flat kiwi, with key levels for the session: support at 0.6645 and resistance at 0.6735 and 0.6810 above.
{AU} AUDUSD Lower => The RBA left rates unchanged as largely expected, removing the paragraph on domestic economy. Although some aspects of the local data have been soft (recently retail sales and consumer sentiment), it looks like the data tape would need to deteriorate more meaningfully in order to induce cuts. We still favour the pair lower with support at 0.7450/55 and resistance at 0.7520/30 and 0.7580/90 above
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