By TraderVox.com
Tradervox (Dublin) – This week, the euro zone leaders have decided to act on Spanish debt crisis by agreeing to support the nation with 100 billion Euros. This gave the euro some upward momentum but not for long as investors shifted their focus to the election in Greece. Greeks will vote on Sunday June 17, and this will be the major event that will shape most of trading next week. Here is an analysis of major currency pairs.
EUR/USD: the euro started the week on a range between 1.24 and 1.2540. It moved up but could not break the 1.2624 level as investors trading with fear of Spain and Italy bond auctions. Sentiments from Fitch about the status of some nations in the euro region did not help the pair to move up. Positive reports from the US and safe haven demand is expected to continue to next week. The major event that will affect this cross is the Greek election in June 17. We expect to see and upside trend if pro-austerity parties win the election and a downside trend if they lose.
USD/JPY: sentiments from IMF diminished the demand for the Japanese currency helping the pair to move up for the first time. BOJ meeting which start today and ends tomorrow will have an effect on the currency. BOJ is expected to wait for the Greece election before it can take any decisive measures to curb the strengthening yen. Safe haven demand is expected to increase in the coming week and we might see the cross moving upwards.
GBP/USD: the cross closed the week at 1.5463 and has slightly gone up to mid 1.55. Increasing safe haven demand has forced investors to go for the pound as crisis in euro area continues to escalate. Spain became the fourth country in the region to seek international bailout and focus is now on Italy. The cross is expected to have a weekly gain this week, which is expected to continue next week. 1.5600 is expected to provide major resistance next week. We have a bullish outlook for the cross next week.
USD/CHF: the cross dropped a cent last week as the Swiss franc reversed its downward trend closing the week at 0.9590. This week the cross has been down to 0.9578 as the Swiss Franc continued to gain momentum; however, this was limited as the cross later climbed to 0.9602 and then back to 0.9573. Next week the cross is expected to be neutral.
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