Euro Pairs Gap Lower On Greek Vote Jan. 26, 2015
Syriza Party Has Clear Majority, Greeks Have Had Enough Austerity
The Greek vote over the weekend will have repercussions throughout Europe once they start the negotiations on the Greek austerity program. Some think they will either leave the Euro or even be kicked out but thats not what will cause the potential shock. What has been needed since the beginning of this mess since long before 2008 is just what the Greeks want and need. The debt write down and a fresh start. Essentially the exact thing most of the western world has also needed but the people at the top refuse to let happen while making things worse along the way. Of course we should expect that the ones holding all the power will do what ever they think necessary to keep what they have but eventually the correction of what has been going wrong since the Ronald Reagan years has to happen. In its most simple terms it all comes back around the circle. What comes around, goes around. In a best case scenario it will be a peaceful transition but when write downs and refusals to pay back all the debt accumulated trickle in, things may get nasty. Lets hope the calmer heads prevail and the big boys who deserve the most losses are man enough to take their lumps and be part of the new beginning rather than fight a losing battle to retain what they more or less stole over the years. Its going to be interesting to say the least.
EUR/USD Drops 100+ At Open
The 65 pip gap and ensuing 100+ pip drop on the EUR/USD this morning does show that they are a bit concerned about the Greek vote today. The gap traders were happy to make some money on the closing of said gap but at this point its looking like there weren’t many buyers willing to push it higher into last weeks price levels. Of course we will have to wait for London to open and see what they think then along with be open on direction the higher probability of course is for a push lower. Having said that, since we have such a wide range already they may just hold within it. At this point the best levels are at 1.1197 for the short and 1.1113 for the long during the London session with the possibility of running stops above 1.1282 even though I have my doubts there will be many buyers to push it. The wild card here is the potential for a tape bomb from the US as they have already started to complain about the strong USD and we all should know the Fed wont be raising rates as long as this continues.
GBP/USD Gaps Up On EUR/GBP Weakness
The move this morning on the GBP/USD only shows that the Euro is a bit weaker than the GBP at this point however if there is a pair that has potential to make a move to the upside today its the GU. While the low of the Asian range at 1.4985 is valid the probability for a test lower before any move to the upside is good as well. Otherwise I would prefer a test of the Asian highs around 1.5026 for the short.
EUR/JPY Showing Risk Aversion Gap
The larger gap and ensuing 173 pip run to the downside on the EUR/JPY shows that the risk off trade is still flowing at the moment. At this point I would be happier with a set up short from 131.83 but I will also be open for the long at Fridays low around 130.81 since the conviction was not all that convincing below. Otherwise the safer entry for a long will be at the current Asian lows at 130.14
Forex News Today
The only significant news for today is German IFO figures. They are expected to improve so a disappointment should have a bigger effect if its big enough. Otherwise I cant say I expect much from it since there are bigger issues going with the Greek vote and the Fed Meeting later this week. If we do get any verbal intervention from Fed members hinting or complaining about the strong USD and potential moves they may make to stop it then we will likely see a pullback on the Euro pairs even though they are more likely to be short lived.
MY APOLOGIES FOR THE BROKEN VIDEO OF INSIDE JOB IN THE COMMENTARY. I DIDNT THINK I WAS COPY WRITE INFRINGING WITH AN ITALIAN VERSION ALREADY ON YOUTUBE. HOWEVER YOU CAN STILL WATCH IT AT THIS LINK. STILL A MUST SEE!
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