Make Or Break For Greece March 23, 2015
High Hopes On Greek Deal Friday May Evaporate This Week
The proverbial Greek tragedy continues but is getting much closer to seeing some conclusion as Greece runs short on cash and bank runs continue. We have heard and seen this story heat up and cool down several times but it has to be getting close. They have held off from hitting the brick wall so far. however the time is near when we will see the end result. As many think, and I agree, that Greece would be much better off defaulting and going back to the drachma but with all the pain already inflicted I can understand why even the current government wouldnt want to subject the people to more pain by exiting the Euro. Having said that the Germans really do want full capitulation or they will watch as Greece is forced out.
On the other hand the Syriza government does have a mandate they were elected on and they are fighting to maintain that promise or there will likely be more riots and probably new elections if Germany has its way. At this point its a hard call. In the beginning I thought the Syriza government would have a stronger leg to stand on. They didn’t hold as well as expected and like I have said before they are more likely to go to the people and give them the choice. I have to say it seems the only way forward. Either the people agree to stay in the Euro and capitulate to Germany or they leave. Simple as that.
EUR/USD Tests Thursday Range High
Fridays retracement on the EUR/USD has some thinking it was due to hopes of a Greek deal. I cant say that I buy the idea, mainly because if that was the case the EUR/GBP should have enjoyed some of the move and didnt. Therefor it only makes sense to me that the big boy who previously thought the US would be raising rates in June have started to see the light, weakening the USD. Having said that things could blow up any moment with the Greek scene and while that would weaken the Euro I have doubts they will be breaking from this 300 pip range in the near term.
I wont have a bias on direction today looking for a test of the Asian highs for a short or potentially 1.0797 while watching for conviction below keeping me out of the long. If they do push below the 1.0760 is valid but the clear break below the 1.08 handle will more likely test down to at least the hourly 200 at 1.0700.
GBP/USD Holding In Range
The GBP/USD is retreating from the highs Friday early this morning but if it can manage to hold these lows they may break it upward later during London today. It will most likely need some help from the EUR/GBP considering the USD weakness but its possible. I wont have a bias here today either but look for either the Asian highs to hold for the short or the lows of 1.4926 for a long. Any conviction either way during London will give me a bias to test the next level up or down.
EUR/JPY Holding EU Correlation
The EUR/JPY does seem a bit weaker considering the USD dropping against the Yen last week but as long as the BOJ stays neutral this pair should continue its main moves with the EU. Again considering the extended moves I wont be bias on direction looking for either 130.63 for a short or 129.65 for the long during London today. I will prefer to see the same conviction on EU in order to get a bias on a break.
Forex News Today
The calendar is rather quiet today until the US session and Super Mario speaks. This should be interesting depending on what he says. I doubt he will do much more than the typical Euro pump and dump but any mention of a potential Greek deal should be enough to get them rolling Euro strength. Otherwise there are a couple Fed member speeches as well even though I doubt they will say much thats market moving there is always the chance.
The Asian session tomorrow has HSBC Manufacturing from China expected to rise but there has already been a revision of the last print to more positive territory so the probability of a miss upward is higher which would be Aussie positive as well.
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