Greeks To Fold Shortly April 28, 2015
Varoufakis Replaced As Lead Negotiator To Troika
Isnt it amazing how things can change over night?
In a move that to me would signal the imminent buckling of Greece to the demands of the Troika. The Greek Prime Minister replaced Finance Minister Varoufakis as lead negotiator for the next Greek bail out. So for now the threat of a Grexit has abated and they have bought some time. The kicker here is that Greece didnt need a referendum to change stance but Tsipras was watching opinion polls that showed an overwhelming majority of Greeks want to stay in the Euro and compromise. Bloomberg notes.
Support for the government’s confrontational stance fell to 46 percent in a University of Macedonia poll for Skai TV published on Tuesday, compared with 56 percent a month earlier. Two polls published over the weekend showed most Greeks want the government to strike a compromise with creditors.
According to a Kappa Research survey published in To Vima weekly, 71.9 percent of those surveyed said a deal with creditors would be best for the country, while 23.2 percent said they prefer a clash. The Alco survey showed that 50 percent of respondents want a compromise even if creditors reject Greek government demands, while 36 percent said the government should opt for a “rupture.”
For now Greece will fall off the watch list as long as things move along nicely and will likely get the Cyprus treatment with some already considering Cyprus as a template for success. I guess we will have to see just how much the Greeks like having their savings confiscated along with the capital controls that were thrust upon the Cypriots. If those polls are an accurate picture of what Greeks want then they should be expecting to be Cyprused but that remains to be seen. For now they see the Euro and Euro Zone as more important.
EUR/USD Makes Short Second Push
With Grexit fears behind us we should be seeing another push upward on the EUR/USD today. It will likely be short again due to the fact we also have the FOMC coming up tomorrow. However I suspect that the Fed will be more dovish considering the data lately. At the very least they will reiterate their reliance on the data would would also be bearish USD with all things considered.
The levels arent so great with the Asian low at 1.0865 having the best probability considering proximity. The range is just wide enough so I would be happier to see them run higher before testing during London. If they do run it lower then a test down to 1.0827 or just above at the four hour 200 that held it nice yesterday before a turn is in the cards. With this being a somewhat questionable second push I will need something very convincing to consider a short.
GBP/USD Extends Push On Greek News
The GBP/USD extended its pushes on the USD weakness yesterday showing it has more potential to make a run to the daily level of 1.5335 in the near future. I will be bias for the long here but more open for a short since the possibility for a turn is there. The best level for the long is down at 1.5186 but if they can manage to widen the Asian range I will consider its lows as well. Otherwise the only place to consider a short is from yesterdays highs around 1.5256
EUR/JPY Tightens Range
With Japan considering more easing (JPY printing) while others arguing against more QE they seem to be waiting for something more clear to push the EUR/JPY around. The levels have changed slightly but with the ones from yesterday just behind the highs at 129.96 for a short and 129.05 for a long. I will be cautious and want a good entry to trade this pair. The chance of a stop run to Mondays levels are good so seeing a clear set up to trade this pair is important.
Forex News Today
The calendar is a little busier today with early GFK German Consumer Climate. This may get them running before London open but would need a bigger miss to create a sustained move. I would more expect a stop run on a small deviation.
The UK has GDP figures later expecting a small drop which may cause some GBP weakness if it drops further than expected. My thoughts are it will be close or as expected and they will continue the next push on USD weakness. Any surprise up and they may start thinking BOE rate increase and we will get big GBP strength in that case.
The US has CB Consumer Confidence expected to improve. I dont see them pushing much on this unless its a large miss.
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