Negotiations between Greek officials and the euro zone colleagues in Riga on Friday have not yielded any result. Behind are lagging promises of staying in touch to reach a debt deal, to hold a teleconference today and a call on Wednesday to speed up negotiations. Maybe these are the hopes left for the Euro which is still holding above the support of 1.0850. The balance is extremely fragile since Euro zone ministers are already thinking about the plan B of a Greek default.
On Wednesday the FOMC Statement will be released and market participants are thinking about confronting the idea that their hopes are delayed later than June. Macroeconomic data disappointed last week and demonstrated that the American economy still needs time. The New Zeeland and Australian dollar gained ground against the US Dollar, while the most important resistance zones for the short term evaluations are 0.7630 – 0.7640 for NZDUSD and 0.7840 for AUDUSD.
USDJPY has been lately (starting with November 2014) trading in a rage (116.00 – 122.00) as the Japanese currency was believed to be highly depreciated and the economy was expected to report better results after the implementation of the QQE program. Now, the price has been stabilized above the 118.00 resistance and the lateral movement may be continued by the quotation going towards the 120.00 resistance level, even higher at the 122.00 local maximum.
The Monetary Policy Statement due to be released on Thursday may keep its dovish tone as the macroeconomic data are still weak. In the neighboring camp, the Chinese state may as well prepare for new dovish monetary policy announcements. The Japanese yen could soon pass through another harmful episode.
After the SNB announcement last week, the Swiss franc has been trying to depreciate, but the tense situation in Greece and the weak American dollar didn’t allow the franc to breath. Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, confirmed that the bank maintains its currency interventions as the franc is currently highly appreciated. A period of lateral movements may follow for USDCHF and EURCHF until the market participants will decide the winning trend.
Oil quotations are trading near the local maximum levels (58.60 for WTI Oil and 65.80 for Brent Oil) as the fights in Yemen continue and there are no signs of dialogue between the Houthi and the Saudi Arabia’s officials. This tense situation, correlated with the U.S. Energy Information Administration’s forecast from Apri of a drop in oil output in May, may keep the oil price high for a little bit more.
