High	Low			High	Low
EUR/USD	1.1203	1.1134		USD/ZAR	12.1436	12.0461
GBP/USD	1.5591	1.5563		GBP/ZAR	18.92	18.76
EUR/GBP	0.7201	0.7151		USD/RUB	51.60	50.74
USD/JPY	120.29	120.06		USD/NGN	200.3	199.0
GBP/CHF	1.4571	1.4478		S&P 500	2,106	2,096
USD/ILS	3.8747	3.8306		Oil (Brent)	65.08	64.65

The Greek government has authorised the payment of the €750m that was due the IMF, ending a period of uncertainty. But.. talks are still ongoing with creditors as to whether the giant €7.2bn expected aid package will be released for the Greek government’s use. As things stand Greek officials are still pushing for Eurozone finance ministers to deliver a positive statement regarding the negotiations to unlock the package. It’s hard to see how this is possible in the current climate where there are significant differences between creditors and the Greek government on a raft of issues relating to the Greek restructuring programme. Pensions and collective bargaining rights are a particular stumbling block, but no doubt, given the radical views of Syriza, there are many more. Still it’s worth noting that Grexit and default appear to have been fairly well discounted by the currency markets to date. One would have to assume that we would require some new information for Greece to once again drive global risk sentiment.

 

Crude oil reached my correction target of $69, and we have since had what looks like a clear impulsive move lower. As things stand, I will state that $69.63 is a level we should not see for some time and if my view is correct we may be about to see the re-initiation of a bearish trend for this hugely important commodity. Please note the attendant collateral impact of lower oil prices on various economies, financial markets and consumers. For now I would assign a medium level of conviction to this view, but as always I will update you as the view evolves. A short term bounce from current levels is entirely realistic before a deeper fall could happen. Watch this space!

 

In about an hour we expect to see industrial production data published in the UK. I will be monitoring the data release closely to see what impact – one way or the other – it has on the pound sterling. This should provide us with a bit more insight into market positioning and how much longer the election euphoria will influence the fate of the British currency. It is after all… yesterday’s news. Later on in the day we get somewhat more significant data…a NIESR GDP estimate for the UK economy. And I will also be keeping an eye out for information coming out in the United States. Some job openings data from JOLT, and also a speech by an FOMC member who has been quite hawkish in the recent past. Not long ago Mr Williams talked about the possibility of interest rate rises in the early summer. Well… it’s very close to early summer if indeed it isn’t already. What’s he going to say now? And what impact will it have on the US dollar and more generally risk sentiment. This could be important.

 

From my technical perspective, all the conditions have now been met for a return to a US dollar bull trend. The minimum requirements for both EUR/USD and GBP/USD have been achieved, granted cable lagged a few days, but I have a suspicion that these currency pairs might be somewhat lower by the end of this week. It will be interesting see the narrative that takes us there, if indeed my view is correct!

 

 

 

 

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