Greeks Say No to Eurozone; Euro Gaps Down for Second Week

Greece has just edged closer to Euro exit after a Greek referendum ended with “No” votes gaining the upper hand. The referendum centered on whether to accept or reject the creditors’ terms regarding the latest aid package. On Monday’s opening, the EURUSD gapped for a second straight Monday and therefore EURUSD could revisit the 2015 lows in the near future if bearishness persists in the market. In the mean time, lines between the Greek government and creditors are open and discussions are still ongoing.

In Japan, Retail Sales data was much better at 3 percent, while analysts expected a 2.1 percent gain. This is the second straight monthly gain. The Preliminary Industrial Production sagged 2.2 percent. Average Cash Earnings grew 0.6 percent, a tad below the 0.7 percent forecast.

Germany’s Retail Sales advanced 0.5 percent as median estimates for flat growth in May, and April’s reading was revised lower to 1.3 percent from the initial 1.7 percent. Unemployment Change showed a decline of 1,000 compared to an expected 5,000 decline.

Spain’s Unemployment Change also declined below forecast at 94,700.

In the United States, the Chicago PMI for June improved but at 49.4, it is below 50 and lower than anticipated. Non-Farm Employment Change was published one day earlier on Thursday due to US Independence Day celebrations. Employers added 223,000 jobs in June, which is lower than the forecast of 231,000. Bureau of Labor Statistics also announced a 5.3 percent Unemployment Rate, a better-than-expected improvement from May’s 5.5 percent. Meanwhile, Jobless Claims filed in the previous week was 11,000 higher than the 270,000 forecast. Factory Orders dipped one percent.

Commodities

Gold continues its bearish path as it struggles to get through the $1,200 level. The vulnerability of the $1,100 increases and we could see that area will get attacked in the coming week.

Oil seems well protected around the $60 level, so sellers pounced and pressured Oil lower throughout the week. We could see a quick attack on the $50 level soon.

Currency Pairs

Monday’s gap in EURUSD set the stage for a bearish week. With the Greek referendum “No” result, we could see more volatility in the coming week. Avoid buying dips.

GBPUSD started the week with a gap and was significantly bearish the entire week. Sellers easily cut through 1.56 and therefore we could see more downside moves in the coming week.

USDJPY closed the week virtually unchanged, but we have seen the fourth lowest weekly high in the process, nevertheless. Any weakness would be more evident if the 121-122 area fails to hold.

The Week Ahead

Monday’s news will be sparsely scattered throughout the day, starting with Australia’s MI Inflation Gauge and ANZ Job Advertisements; then Germany’s Factory Orders; Switzerland’s CPI; Canada’s Ivey PMI and Bank of Canada’s Business Outlook Survey and US ISM Non-Manufacturing PMI.

Tuesday will be kicked off with New Zealand’s NZIER Business Confidence, followed RBA Rate Announcement and Statement; Switzerland’s Foreign Currency Reserves; UK’s Halifax HPI, Manufacturing Production and Industrial Production; Euro Summit; Canada and US Trade Balance; US JOLTS Job Openings.

Wednesday will be much shorter than usual with Japan’s Current Account; UK Annual Budget Release; Canada’s Building Permits; and US FOMC Meeting Minutes.

Thursday will have Japan’s Core Machinery Orders; Australia’s jobs data; China’s CPI and PPI; UK BOE Official Bank Rate, Asset Purchase Facility, and MPC Rate Statement; Canada’s NHPI; and US Jobless Claims.

Friday will wind down the week with Australia’s Home Loans; China’s New Loans; UK Trade Balance; Canada’s jobs data; and Fed Chair Yellen’s speech.