Greece Holding Out, “Will Run Out Of Cash Within Weeks” Feb. 9, 2015
Greece To Set A Precedence, Alan Greenspan Says Euro Zone Cant Exist Under Current Framework
Its easy to see just how politically motivated the central banks are when once the heads of them leave they all of a sudden get a stroke of honesty and say what most of us know already the latest was from Alan Greenspan.
“The problem is that there there is no way that I can conceive of the euro of continuing, unless and until all of the members of eurozone become politically integrated – actually even just fiscally integrated won’t do it.”
And previously Mervyn King after he left the BOE
“more monetary stimulus will not help the world economy return to strong growth.”
When the same guys that were all about preserving the status quo when they held their position all of a sudden turn and more or less find religion it shows just what a quagmire they, the bankers and politicians have built.
In short the only situation that will keep the Euro Zone going is the Greeks caving into the Troika, which doenst seem likely at this point. There are two other outcomes that in either case will set a precedence or a template for other countries to follow. Some think that eventually the EU will cave in and let Greece have it their way. The problem with this course is that other debt strapped countries will want the same treatment which makes it that much harder for the EU to give in. The other scenario is Greece is forced out/leaves the EU which also sets the example of how the EU is not as solid as they say. Yes the ECB can backstop this scenario from imploding for awhile since they have a green light to fire up the printing press but it wont be long before the other debt strapped countries see that Greece is finally on a path that they can sustain and places like Italy, Portugal and Spain will want to do the same. This will likely take a few years before Greece shows signs of recovery but for now looks to be the least painful alternative for the EU.
EUR/USD Gaps To Last Week Lows
With this chop from last week holding still I will be open on direction for the EUR/USD until we get a break. In normal circumstances I would expect the more they pound the levels the higher the probability they will break but with both sides getting hit equally there is no reason to think this range will not hold until it breaks. As long as the Asian highs hold I will be open for the short at 1.1325. Otherwise I will also consider a long from 1.1293 if there is no clear entry for the short. If they do show conviction above the Asian highs during London I will look for a backside entry to catch some of the retrace of the NFP move Friday.
GBP/USD Shows Intraday Push Down
I will have a small bias for the short on the GBP/USD today but being an intraday push does keep me open for the long as well. The best level for the short is up at 1.5268 but with the Asian range wide enough and the gap closed I will consider the Asian highs around 1.5251 during the London session today as well. The only level I will consider a long is at Fridays lows around 1.5217, preferably with a stop run below.
EUR/JPY Holds Upper End of Range On USD Strength
It dont make much sense to me that the USD should see strength on the NFP data along with the Unemployment rate rising. However it does add to my theory that the jobs data in the US is not as relevant as it used to be. At this point I will remain open on direction for this pair. Although the Asian high/low are valid levels during the London session today, the safer entries will be from the high/low of Fridays range.
Forex News Today
The calendar is slow today with not much worth mentioning other than potential tape bombs on the Greek situation coming from the G20 meetings. This should be interesting how much pressure is put on Europe to solve the Greek fiasco. Im sure they will try to play it off as a Greek exit will be just fine and to start it most likely will be, until of course it isnt.
Asian session traders have some Chinese data to keep an eye on tomorrow morning if trading the AUD crosses.
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