EUR/USD

The pair finished the week in minor negative territory as investors continued to fret over the stability in the Eurozone amid speculation that Italy will be the next country to seek monetary assistance. Nevertheless, Italian PM’s call for both his and opposition parties to accept the austerity programs, which was promptly followed by a confidence vote, alleviated concerns over the country’s debt profile. In addition to that, Berlusconi emphasized that his government will run a primary budget surplus this year, while Fitch Ratings said that the country can cope with this week’s increase in bond yields provided it meets its deficit-reduction targets. Finally, technical studies indicate that support levels are located at 1.4092/08 and then at the 200DMA line at 1.3910. On the other hand, resistance levels are seen at the 10DMA line at 1.4239 and then at the 100DMA line at 1.4288.

GBP/USD

Despite starting the session on the back foot, the pair finished the week higher on the back of renewed risk appetite in the latter half of the week following alleviation of fears over the Eurozone and more importantly the peripheral states. In terms of this week’s data, the latest CPI report surprised market participants with a much lower than expected print, while the latest jobs report showed that the UK unemployment fell 26,000 in the three months to May to 2.45mln. Nevertheless, the number of people claiming Jobseeker’s Allowance in June rose by 24,500 to 1.52mln – the biggest such increase in two years. There were also cautious comments from the British Chambers of Commerce (BCC), stating that there is a growing concern that the economy may falter, while accountants from prestigious firm BDO noted that business confidence is at its lowest for two years. Finally, technical studies indicate that support levels are seen at the 21DMA line at 1.6064, followed by the 10DMA and 200DMA lines at 1.6051. On the other hand, resistance levels are seen at 1.6159, 1.6242 and then at the 100DMA line at1.6247.

USD/JPY

The pair finished the week lower and more importantly below the psychologically important 80.00 level as market participants continued to fret over the Eurozone, and whether US administration will be able to address the budget deficit amid the never-ending talks to raise debt ceiling. In addition to that, the move lower was caused by threats from rating agencies to downgrade the US off its AAA sovereign rating if the debt ceiling proposals fail to address fundamental flaws of the US economy. In terms of technical levels, supports are seen at 78.89/45 and then at 78.00. On the other hand, resistance levels are seen at 79.61/97 and then at 80.01.

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