Despite a weekend attempt to arrive at a late deal between Greece and its creditor’s, no further progress was made as the prospect of a default draws ever closer. The fact is, unless some significant concessions are made on either side a default is now more or less inevitable, and even if a plan were agreed that was agreeable to the creditors, it is unlikely that the Greek government would be able to get it through their parliament. It can therefore only be a matter of time before capital controls are introduced, particularly given that the Greek Prime Minister Alexis Tsipras has more or less indicated that he won’t make a deal without debt relief, something that the Greeks do see eye to eye with the IMF on. Given that Germany won’t countenance anything like debt relief at this point, we are likely set to see a continuation of this game of political “cat and mouse” through this week’s Eurogroup finance ministers meeting on Thursday, and beyond to the end of the month. It does rather beg the question as to why we can’t all end this charade which suggests a deal is even possible, and fast forward to the bit at the end of the month where the default happens and we can move on to the next stage of the process. While the to and fro from events between Brussels and Athens continues to weigh on sentiment, events in the UK as well as the US are also set to be in focus this week with the latest FOMC rate meeting also on investor’s radars, while the pound shrugged off a ratings agency outlook downgrade by Standard and Poor’s of the UK’s credit rating, to a negative outlook. In a highly political intervention the agency warned that the UK might lose its “triple A” rating in the event of an EU exit vote. While S&P is the only agency to still rate the UK as “triple A” its intervention is unlikely to be particularly welcome politically, even though its intervention is more to do with concerns about the large deficit, and the UK’s ability to fund it, in the event of the uncertainty such an event might entail. Last week’s economic data from the US has raised market expectations of a Fed rate hike at the September meeting. While some of last week’s economic data was no doubt encouraging there still remained some significant soft spots in the data, in particular the latest PPI inflation data. It showed that inflationary pressures continued to remain benign. What inflation there was reflected in a move higher in gasoline prices, but on an annualised basis prices came in weaker again, rising 0.6%, below expectations of a rise of 0.7%. Over the past few months US industry has borne the brunt of concerns over the US economy, with the fall in the oil price hurting the US oil and gas industry and rippling out into the manufacturing sector. Today’s release of the latest industrial and manufacturing production data for May are expected to show some improvement, but are still expected to remain fairly weak. US industrial production for May is expected to improve from April’s 0.3% decline, and rise by 0.2%, while manufacturing production is expected to rise 0.3% from 0% in April. EURUSD – the euro seems content to range trade between support at the 1.1050 level and the highs this month at 1.1380/90 level. We need to see a break either side to get an indication of the next move here. The main resistance remains at the May highs at 1.1480. GBPUSD – having got within a whisker of the 1.5600 level on Friday, the next target sits at the May highs at 1.5815. Only a fall below the 1.5400 level suggests a move back towards trend line support at 1.5290, from the lows this year at 1.4565. EURGBP – the euro dropped down to 0.7195 last week, suggesting we could well see further weakness in the short term. To mitigate further downside pressure we need to get back through the 0.7300 area, otherwise we could well see further losses towards 0.7080. USDJPY – the break below the neckline support late last week now at 124.20 opens up the prospect of a move towards 121.80 as the recent topping pattern alluded to yesterday played out The 124.20 neckline level should now act as resistance on any pullbacks. CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.