So an important week for Greece, Non-Farm payrolls out on the first Friday of the month and FIFA officials carrying bags of cash. Same old same old.
We forecasted that GBP/USD would trade between 1.53 and 1.55 last week and so it transpired. I think we’re now on for the next leg lower. I would suggest we’ll have another go at 1.50 the figure. As you know, I’ve been bearish on Cable for 12 months and I don’t see any reason to change that outlook. Indeed, we’ve had UK PMI figures out this morning that came in at 52 against expectations of 52.5. GBP/USD came off after the release. We have the ISM Manufacturing report out from the US this afternoon so I would keep an eye on that data today. Should we see a strong number then I think we’ll see the Dollar resume its ascendency and we may test 1.50 the figure this week. If you are a USD seller please contact myself or one of the team to discuss implementing a market order. If you are a USD buyer I would look at placing orders so you can take advantage of any moves higher. However, I thought last week that the chances of a move higher were slim and I stick by that. We were at 1.47/1.48 not that long ago. Can you afford to be under 1.50 purchasing USD? As I always say, doing nothing is speculating. Contact one of the Aston team today and we’ll work out a strategy for your individual requirements.
Range this week – 1.50-1.53
That got exciting didn’t it. Will we now settle above 1.40? I doubt it. We may have another go at 1.40 and perhaps even 1.41/1.42 this week with Greece due to repay funds to the IMF on 5th June. The Euro will likely come off prior, Greece will scrabble around and get the cash, payment will be made then we’ll see some EUR strength on the back of it. This payment isn’t the one to worry about for the markets. It’s the next few that are the concern. The EUR has been under pressure for the past couple of weeks although with EUR/USD pushing up to test 1.10 end of last week we’ve seen some respite for the shared currency meaning GBP/EUR may trade in a range with a slight bias to the downside this week. I don’t fancy GBP/EUR much higher than current levels and I think we’ll see a move lower. Wednesday we have Draghi speaking and of course the Greek situation will be front and centre.
Range this week - 1.38-1.41
If you have any questions please let me know.
Have a great week.
Written by Liam Alexander