Proposed Greek Loan Firmly Rejected By Germany Feb 20-2015
Greeks Ask For Loan Extension, Germany Rejects Hands Down
As the game of chicken progresses we are more likely to see more aggressive moves from Greece. They are not going to extend the current bail out program without some concession from the people. Holy cow, true democracy in motion. After reading an article by Reggie Middleton this morning there has actually been a plan set for what would be the best way for a country leaving the Euro Zone. The producers of the plan won a prize for it back in 2012 when a contest was started to get some of the smarter minds behind getting something together to manage a Greek exit back then. Low and behold it involved backing a new Drachma in gold. I have to admit its one heck of an idea and I can only assume that the new Greek government will be considering it as a last resort.
Having said that I am also sure this would be a last option and they would need a referendum in order to get the people on board. At this point my thoughts that Germany will hold firm as well due to the blow back it would get from its people along with the precedence set for other bankrupt nations such as Italy, Portugal etc. So what is next? I expect the funding to be cut for Greece at the end of the month and maybe just before that happens Greece will put the bug in the ear of its people of getting out of the Euro. To be honest I hope it dont come to that but from my perspective it seems most logical considering how this has progressed so far.
EUR/USD Test Of Range Highs Produce Nice Set Up
The EUR/USD making the push to test the range highs yesterday provided a nice confirmation entry during the London session live training room. I was very happy to see that numerous members caught it as well, some not even being in the room. Great job guys. Personally I managed to book 53 pips on the run since I did not want to hold it through US data releases while others took the 1-2 R/R at 40 pips and others closed for high 70s.
Today we are back in the range and have tested yesterdays lows during the Asian session making it a valid level for a long today if they manage to widen the range a bit more. If we dont see the wider range I will be cautious on any long there with the daily levels just below. Otherwise the 1.1394 is valid for a riskier short but the way things have been running through this chop on the Greek deal I prefer to wait for the highs to be shorting from.
GBP/USD Holds Topping After Push Up
With the GBP/USD holding the topping formation I mentioned in yesterdays commentary the probability for the next push has gone down substantially. Therefore I will be more open on direction today and looking to trade short from 1.5458 or long from 1.5408.
EUR/JPY Holds Lows Of Intraday Push
I would be remis mentioning the EU trade that worked out and not the more aggressive EUR/JPY trade that took me for a hit yesterday. The set up at the Asia range highs was very nice and with the range being wide enough I thought it was worth the risk. Although the direction was right they wanted to test the next level first and I took the hit. It also showed the confirmation entry but I felt the EU was the better trade of the two and it worked out nicely.
Considering they couldnt push it down showing at least another intraday push I will be open on direction here as well. Holding in the lower end does suggest that it will go down but its not enough to give me a bias. The best level for the short is 135.90 but I will be watching 135.70 as well. Otherwise I will be open for the long at 135.10 while watching for conviction for a backside entry if it breaks and Im not already short.
Forex News Today
The calendar is busy during the London session starting early with German PPI data then French, German and Euro Zone Manufacturing and Services PMI. The PPI is expected to improve but still be below zero which still shows potential recession for Germany so not good unless it pops above zero. The PMI releases are expected to improve as well but the German and EZ figures are close enough to the 50 level a larger disappointment to show contraction as well. As long as they remain above 50 or come out slightly better than we shouldnt get too much movement.
The US has no data to mention for the day today.
Have a great weekend
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