Ex Greek PM Papademos Rattles the euro

Ex Greek PM Papademos Rattles the euro. Euro crushed late in NY session after Ex Greek PM Papademos warned that “risk of Greece leaving Euro is real”. Although denials came later that Greece leaving euro is unlikely to materialize.
EUR/USD
Range: 1.2646 – 1.2685
Support: 1.2643
Resistance: 1.2709

Euro-dollar closed in NY at 1.2685 after rate was pressured to late lows of 1.2658 as market reacted to ex-Greek PM Papademos that Greek EMU exit plans were being considered. Rate held above 1.2680 into early Asian trading before dropping to 1.2648 on reaction to reported comments from CIC Chairman Jin Liqun that eurozone leaders should stop wasting time. Dollar-yuan fixed higher prompted another round of general dollar demand which dropped euro-dollar to session lows of 1.26432. The rate then recovered, aided by Papademos denials in a CNBC interview of earlier reported comments, adding that Greece leaving euro unlikely to materialize. The rate edged to early session highs at 1.2685, opening Europe around 1.2674. Bids remain in place to 1.2643 with stops below, a break to open a move toward 1.2624 though option interest at 1.2625 expected to be protected.

GBP/USD
Range: 1.5743 – 1.5766
Support: 1.5743
Resistance: 1.5780

Cable closed in NY at 1.5766 off late session lows at 1.5743 after rate tracked euro-dollar’s negative reaction to ex-Greek PM comments. The move lower was tempered by euro-sterling extending its corrective pullback off earlier highs of 0.8102 to 0.8042. Cable continued to take direction from euro-dollar, the rate moving down from early posted session highs of 1.5771 to retest NY lows at 1.5743. The rate recovered to 1.5767, opening Europe around 1.5750. Euro-sterling’s extended ease to 0.8032 in Asia provided cable with some underlying buoyancy, though tone remains heavy. Cable bids into 1.5740, stronger between 1.5735-1.5730. Offers 1.5780-1.5785.
Gold
Range: 1,556.26 – 1,567.58
Support: 1,553.95
Resistance: 1,586.93

Gold prices were undermined yesterday by a weak euro and a lack of buying interest ahead of the European Union Summit scheduled for today with overall sentiment towards the euro remains bearish and most European Union officials have tended to downplay the prospects for meaningful progress or agreement at the Summit. Expectations for the outcome of the Summit remain subdued. Surging Indian scrap market could reduce demand for imported gold with a commensurate impact on prices. Support now seen at 1,553.95, followed by 1,541.36 and then 1,517.82, resistance looks at 1,574.33, 1,586.93, and a move higher at 1,594.71.