New Greek Govt. Changes Tune Feb. 3 2015
Greek Finance Minister Changes To New Debt Scheme Rather Than Write Down
Its interesting how pressure from the Troika can change things at least on the surface. Now the Greek Fin Min has changed the wording from “Greek debt write down” to something of “menu of debt swaps”when in reality they mean the same thing to a degree. In short the ECB would lose all credibility if they allowed a Greek debt write down so what they have done to make it acceptable is just call it something else and run the scheme a slightly different way. Its still up in the air as to whether or not the plan will be accepted but I have a feeling the answer will be a big NO in the end.
This is just the beginning of the debt battle that lies ahead since the reality of the situation is that there will most likely have to be a total restructure of ALL debt which not just concerns the west but Asian and all other countries that have lived well beyond their means over the last few decades. In simple terms there is almost no way possible that the debt could get repaid without some substantial growth that just isnt happening and most likely wont happen due to the structure they have built over this time. The powers that be are only trying to protect them self and there lies the rub. Until they are out of the picture there is literally no change of sustainable growth and they will not be going voluntarily.
Only when the people get so angry that the oligarchs have to be put in their place will there be any real change. Just read the article at the end of the news analysis and you will see they are getting scared.
EUR/USD Range Tightens
I am never happy to see price compress like it has on the EUR/USD but this does happen from time to time. It clearly shows they are waiting for something and nobody wants to be the one who sticks their neck out first. The best we can do is trade the set ups and book the smaller profits or hold the trade at break even with the take profit well out of price range to catch the break when it does happen. Today the best level for the long is at 1.1306 and the short from 1.1354. However I will say the risk is higher as price compresses with other levels just behind they could run stops to.
GBP/USD Holding In Third Push Chop
I will be open on direction for the GBP/USD today as well but by the looks of things there seems to be a risk aversion scenario brewing. Its no reason to have a bias since things could change in a millisecond if Greece does fold and give into the Troika. That said I have my doubts and hope not but its surely possible. The best level to short hasnt changed at 1.5088 but the 1.5061 is valid along with potential at the Asian highs if they can open the range a bit more this morning. As usual any entry in the range is riskier. The only level for a potential long is at 1.5008 but if they want to run stops they will dip deeper before any move up.
EUR/JPY Holding in Lower End Of Range
With the EUR/JPY holding in the lower end of the four day range there is some hope we may also see the ADR tighten to a more normal figure but I wont be holding my breath. If the risk off push does come this pair should have the largest move. At this point we do have some conviction to the downside so a test of 132.35 is likely. If it dont do it by the time London opens today I will be bias for the short to see that test. The best level to short right now is the pullback to 132.84 as long as this next candle closes closer to its lows as well. Otherwise they may pull it back a little deeper before running down. I will also be open for the long from 132.35 if there is no short entry and it tests early during London with a clear set up. If there is conviction below then I will be looking to short again for the potential run to the ADR.
Forex News Today
The calendar is slow today with only UK Construction PMI during the London session. Expected to drop slightly, my thoughts are it will be close or disappoint being bad for the GBP. If it does miss big the move will likely be taken up in the EUR/GBP unless the risk aversion kicks in.
The NY session does have some Fed speeches so those could get interesting depending on what hints they drop. I expect it to be the party line of rate increase potential but not in the near future.
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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