Forex Trading Library

The IMF “bares criminal responsibility” for the situation in Greece

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Is the EURUSD tendency rising? Probably, if we look at the daily chart, but even there the situation is not good. The technical evolution slopes towards the minimum day by day. The euro is wrestling with the Greek problems and the apparent incapacity of the officials to put an end to this situation. Recently the PM, Alexis Tsipras, told lawmakers from his party in Parliament that the IMF “bears criminal responsibility for the situation in Greece”, this after Mario Draghi put pressure on the Greek PM to take the next step in order to get to an end of the negotiations.

As it has been proved, the euro is not as affected as we have thought, probably considering the Grexit a healthy decision, but the tension is fully felt by the capital markets. Athens Stock Exchange Index is close to the minimum of the year and technically, it is vulnerable to slides under 700 points. The German DAX fell yesterday to 10800 points, and even if today we may enjoy technical positive signs, the trend remains descendant. A new deadline for the negotiations was set for tomorrow’s Eurogroup meeting.

During today, the market may experience a high level of volatility due to the UK MPC Official Bank Rate Votes, which are most likely to show all nine rate-setters to vote for keeping the policy on hold in June. The pound remains strong in front of both the American dollar and the Euro. GBPUSD outlined a lateral movement (1.5630 – 1.5653) and a breakout in each of the two directions may set the day’s trajectory. Technically speaking, a most probable move would be a breakdown of the 1.5630 level, which would bring the price in the bottom side of the upward channel (1.5594, 1.5570, 1.5540).

Yesterday, the BOJ president, Kuroda, denied the message of his last speech as he was not making any assessment of nominal yen levels, but explaining the currency’s historical trend. He declared that he still wants to see a weaker yen, a fact that is already moving the USDJPY quotation. Once the 123.60 resistance level is exceeded, the price may rise up to 123.74, 123.85 and 124.00. In the medium term, the price may get back to the levels from before the “favorable yen comments” at 124.40

Until the end of the week, we have 4 important monetary policy decisions which will cause significant movements of the market:

  • Today the Fed will announce the interest rate (no changes expected), but the market participants will closely watch the Janet Yellen’s conference press. The dollar may appreciate if the Fed’ Chairman tone gentles giving the recent positive data from the economy;
  • Tomorrow the SNB Interest Rate Decision will be made public. Even if any changes are not estimated, market participants could fear further SNB market interventions which would decrease the Swiss franc;
  • Norges Bank Interest Rate Decision – currently at 1.25%, the Norges interest rate risks a cut fact that could put a lot of pressure on the Norwegian currency;
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