Markets under control despite resounding OXI from Greece yesterday. As we noted last night the price action is about testing the levels form last week and overall key levels for the indices and macro. Right now the Euro us holding the range but has been weakening over the last hour to see if we test when the US gets back from a long holiday weekend. I wouldn’t expect the fireworks are over for today. The real level to hold is 1.075 in our view. We would be playing the Euro short to that level.
Meanwhile the DXY has finally broken through the key 96.25 level it was holding despite a week of tests that started last Sunday night. Again, the jury is still out on a move higher if it can’t hold these gains but we are confident that Fed dynamics( Fed minutes this Wednesday btw) and Europe are all this index needs. We think you stay long the Dollar across 100 on the DXY. Commodities appear to be collateral damage today (see below).
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