GBP

The pair that posses the biggest threat is USDJPY. Below 8820 the risk is high for a move below and that in time can be a big significant move possibly test of last years lows below 86 level. 8840 can hold as a triple bottom for USDJPY and again for now that remains to be seen.


Cable breaks 150 and if does not sustains 14965 level then it will be considered as a false break out which is mainly due to the cause of automated traded funds that pull or push market for short term profit taking.

UK Budget Will Cost 1.3 M Jobs Treasury

Guardian exclusive: Leaked government data concerning next 5 years shows hidden costs of austerity drive.http://www.guardian.co.uk/uk/2010/jun/29/budget-job-losses-unemployment-austerity

Cable down at 1.5021 from around 1.5065 when I sat down. Yesterday was hearing stops through 1.5010-5 and larger through 1.4970 and have no reason to think that wont be the case today.
Obviously month end and there will be the usual expectation of European central bank buying of the EUR/GBP cross related to UK s payment to EU. Will be interesting to see whether this can make a dent in the well-defined downtrend. Cross presently at .8132, marginally firmer from North American close Tuesday down around .8090.

US wrap-up: Global growth tremors roil markets


S&P Case Shiller home price index rises 3.8% y/y as US subsidy comes to an end
US consumer confidence plunges to 52.9 in June from 62.7 in May
Obama, Bernanke meet on economy; Bernanke said only Its important for us to take that global perspective as we discuss the economy. Obama puts on brave face
BOEs Fisher warns of premature tightening; deflation risk not dead
ECBs Nowotny: Low inflation gives ECB room for maneuver on monetary policy; hint of willingness to ease from member of hard-euro block?
Obama presses for carbon tax despite economic weakness
S&P closes at 2010 low of 1041, down 3.1%; US 10 year notes close at 2.95%, lowest in 14 months
Oil falls 2.70 to $75.55; CRM falls 2.75%
China growth jitters, European funding concerns and growing evidence of a US double-dip sent risk into a tailspin today.

EUR/USD fell as low as 1.2150 before central bank and real money buying slowed the slide. After a false break out Friday a test of 1.2150 was inevitable, will it stop here? Well good question but I guess a general weakness seen for now cause for concern if any mid-term there is growing demand and on reforms-side seen some stability. Today's rebounds were limited to the 1.2210/15 area. Small stops cluster at 1.2225 with stops also below 1.2150. Remember, if you see a clear break of 1.2240 then we know that the up side has begun. Euro lead the drop after clear selling noted in the Asian session, accelerated by European session as bond spread widened on risk to European Sovereigns to default. This was evident in Euro facing all time lows vs JYP and CHF, while some recent lows across some other currencies. With the recent CB repayments I expect to gain some temporary strength.

EUR/GBP and EUR/CHF continued their declines. Dovish comments from MPC member Fisher (see above) helped cool the GBP rally. Month-end demand for the cross is likely tomorrow as the UK makes a payment to the EU. I have made clear blunder by not opening an important email concerning EURCHF on 15th when I went long but I had recieved a recommendation for sell. It went something like...that a high-profile US hedge fund advisory firm that the market pays such attention to opined that the the SNB would tolerate a CHF as strong as 1.30 Shortly there after the SNB announced they were halting their failed intervention strategy and EUR/CHF went into freefall.We are now about 1 trading day from the 1.300 level at the present pace. Will the SNB show its hand? Inquiring minds want to know.. What do you think? Despite EUR/CHF slipped to 1.3167 as dip buyers continue to be laid to waste.

USD/JPY fell to 88.29 on risk aversion and ends at 88.53. Low US yields contributed to the JPY rally.Can expect some side way movement to diminsh the momentum. Japanese banks were peddling 88/98 DNTs a few weeks ago. We would not be surprised if they were doing that in response to interest from China in the same structure. Using that thesis, Is imagine there will be some protective buying on the approach of 88.00 along with some heavy sales from market making banks trying to knock-out the structures so they can pocket the premium without any longer having any risk..USD/JPY trades at 88.35, the lowest levels since the flash crash in early May. The low that day was 87.95. My personal recommendation this is a easy trade to buy from 88 level and hold till 94.

AUD and CAD were shed throughout the session as global growth fears reached new depths today after the US consumer confidence data. A plunge of that magnitude was eye-opening for the market and suggests consumers will put their wallets away in the months ahead, slowing the already tenuous US recovery. AUD fell to 0.8475 and USD/CAD reached 1.0574. Monday's double-digit losses in gold showed little in the way of reversal signs early this morning as news that [revised] Conference Board calculations indicate a possible slowdown underway in the economy of the now largest exporter globally: China. The corrected leading Chinese economic index figure showed an April gain of just 0.3% as compared to the previously reported 1.7% rise. The news undermined speculative appetite and dented a number of stock indices, commodities, and boosted the Japanese yen. That just the one that got away. That said with rising uncertainty and lack clearer reforms from gov's I expect to hold both Oil and Gold for further gains and maybe new yearly highs.

The sharp fall from the big Fibo at 88.00 stalled initially at 71.90 from where it bounced in a 3-wave retracement. With the 100 and 200-day MAs providing a ceiling of sorts and with the shorter term MAs now turning lower, the risk would certainly seem to be to the downside.

GBPAUD was my clear winner today clearing 400 points above last weeks top. Just under 100 points short of posting monthly highs from lows seen around

Aiding the bid in GBP today:


By Scott Hamilton
June 29 (Bloomberg) -- Bank of England Markets Director Paul Fisher said that the central banks mandate is clear on what to do if inflation pressures in the economy persist in the medium term.
While we need to be sensitive to the risk of tightening policy prematurely, Fisher said, should it appear likely that inflationary pressure is sustained at a higher level into the medium term, then it is clear what our mandate would require us to do. Fisher made the comments in a speech on June 14 in Liverpool, England. The remarks were released today by the bank.