FX snapshot

An apparent Greek deal this morning gave a strong boost to risk appetite, sending the euro surging as markets looked to put a difficult weekend behind them.

Source: Bloomberg

EUR/USD lifted by Greek resolution
So Greece is fixed, apparently. The euro has taken the news well, moving higher so far this morning, although the $1.12 level/50-day simple moving average continues to be a problem, as it was at the end of last week.

Nonetheless, the really difficult work appears to be done, even if the measures still have to get through national parliaments, including the Bundestag. A breach of $1.12 will be key, but so long as stochastics remain bullish I continue to expect further upside.

The quick move lower we have seen in EUR/USD back towards $1.10 is hardly surprising given the magnitude of the move higher on Friday. That said, a rising hourly trendline off the 7 July lows means that we could see a dip as far as $1.1056 before a bounce materialises. 

GBP/USD cements its bullish outlook
The pound has moved steadily higher, taking its cue from the general relief at news of a Greek deal. We saw a bottoming process develop last week, with Friday’s strong move cementing the bullish outlook.

The first target is $1.56, which would then put GBP/USD in a good position to challenge the rising April trendline from below. 

USD/CAD enters a consolidation period
This pair has bounced yet again from the C$1.2680 support zone, as what looked like the beginnings of a downtrend transforms into a consolidation period. So far however bounces run out of steam around C$1.2740.

A breakout from this range would either see the pair test C$1.28, or prompt a downward move that will head towards $1.2574 as a first downside target.

USD/JPY continues its move higher
The dollar is moving higher against the yen for a third successive day, breaching Y123 and heading towards resistance at Y124.

A break of this level, backed by bullish stochastics and relative strength index, would target the June highs around Y126. A continued move downwards for USD/JPY would first find support at the 50-day SMA at Y122.43. 

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