Fx EUR/USD commentary January 30, 2012
I hate to say it but Greece is in our cross hairs again. After a very bullish Friday due to more and more “we are almost finished with the PSI deal” Germany has come out over the weekend and made a bid to attach the next bail out for Greece to a release of fiscal sovereignty for the debt laden country. Of course Greece has politely told Germany to stick that where the sun don’t shine. The bail out may just be dead in the water.
I have to admit I cant say I blame them. Greece has promised many things to get the bail out and has only a very small percentage has come to fruition. In my view this is akin to lending money to your neighbor who is in debt up to his ears and then see him take the money he borrowed to go out and buy a new car when he already has three he cant afford. Here is a quote from Wolfgang Schauble from the WSJ. “Unless Greece implements the necessary decisions and doesn’t just announce them … there’s no amount of money that can solve the problem.” I couldn’t have said it better myself. The “rescuers” in this type of situation will actually become “enablers” and only make it worse in the future there is no question about that. Although one must also admit that thus far the EZ core countries have actually been the “enablers” for a number of years and are just now getting their crap together. It is amazing to me how most people in this world only have the ability to accept change when we are forced by a crisis. Been there done that.
I ran into this funny video this weekend everyone should check out for a good laugh. However when I think of the truth to it its actually very sad that our governments all have done this to its people. Sad indeed.
The news today is light but has potential to erratically move the market. With the EU economic summit and German CPI data going on all day. There will most likely be reports trickled out from the summit all day of which everyone will be looking at closely. This could be a choppy Monday.
Getting to the charts we had one heck of a bullish close Friday on the daily chart however its is interesting how price was stopped at the the 1.3228 level which is the high from December 13th and low from November 25th a clean break above this level and we will most likely see 1.3287 where there is a break out level that should be defended. Personally I don’t think its going to do it but the Smart Money may want to attempt another short squeeze so I will watch closely. Looking at the 15 minute chart I see that there hasn’t really been an attempt to test the highs so far and Tokyo is just about to open so its unclear for now. I will be looking for a stop run at London open and the market intent before any trades today. Like I mentioned above it may be choppy today.