- US final UoM consumer sentiment revised from 94.6 to 96.1
- Tsipras calls for referendum over terms of new bailout deal
- Tsipras asks for short extension until referendum votes are in, gets rejected over the weekend
- Greek banks, markets to stay closed until July 6
- Greece imposes stricter capital controls
- Japan industrial production, retail sales data on tap
Risk aversion dictated forex price action during the U.S. trading session, as traders squared off their high-yielding positions ahead of the weekend meetings between Greece and its creditors.
The dollar gained pips across the board despite the absence of major economic data from Uncle Sam. Ditto for the yen, which also saw gains across the board save against the dollar and the pound.
No need to look far for the cause of these moves. For those who have been living under a rock, you should know that Greece’s bailout program expires at the end of the month (that’s tomorrow!) and is scheduled to pay the International Monetary Fund (IMF) 1.6 billion EUR in return.
But with no deal (which means no money) in sight and the deadline looming over the heads of the Greeks and its creditors, investors around the world are getting worried. It also doesn’t help that the ECB had stopped increasing its Emergency Liquidity Assistance (ELA) and more and more Greeks are withdrawing their euros from their banks.
EUR/USD was in focus during the session, as it ended the session just below the 1.1200 handle with talks of the pair possibly dropping to as low as the May lows of 1.0800. Other euro pairs didn’t do so well either, with EUR/GBP sliding by 27 pips (-0.38%) to .7095 and EUR/JPY slipping by 16 pips (-0.12%) to 138.28.
The high-yielding comdolls also had a hard time finding support throughout the session. Gold prices ended the day higher but AUD/USD and NZD/USD barely moved from their session open prices. The Loonie got a bit more support though, as oil price action pushed USD/CAD 42 pips higher (+0.34%) to 1.2316 and CAD/JPY 49 pips higher (+0.49%) to 100.52.
Let’s see if Asian session forex traders share the U.S. traders’ worries. Lots have happened over the weekend and not one bit of it was good for the euro. For starters, talks between Greece and its creditors broke down and ended with Tsipras calling for a referendum in July 5 to ask Greeks whether or not they accept the new bailout terms. Unfortunately for Tsipras, the European finance ministers had refused to extend the bailout payment deadline until then.
Will this mean a Greek default this week? Keep close watch and be extra vigilant with your trades this week, folks!
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!