The German index DAX already feels suffocated by Greece’s problems, responding with irascibility at every rumor. Euro zone finance ministers ended their third meeting in a week without an agreement, while discussions were postponed to Saturday. A deal is still possible, the European leaders are saying, while the Greek side is still reluctant when it comes to accepting European reforms. What increases the pressure is the ECB’s harshness in not raising the ELA ceiling that maintains liquidity in the Greek banking system.
The German index is sensitive and vulnerable to further slips The active support area is located at 11357 points (a breakdown could send the price lower in the 11215 support level and after that the positive gap from Monday may be finally corrected and the quotation will probably fall down to the 11066 – 11060 area), while the resistance zone is situated near 11637 (strong price fluctuations do not exclude the possibility of a retest of this region).
EURUSD is trading sideways 1.1223 – 1.1157 as the Euro remains calm in the Hellenic storm. The American dollar enjoys mixed data as the Final GDP was reported in line with expectations at -0.2%, Unemployment Claims also were published as expected at 271k, Core PCE Price Index remained at 0.1%, Personal Spending increased by 0.9%, Personal Income was released below expectations at 0.5% and Flash Services PMI decreased by 54.8 points. Federal Reserve Governor Jerome Powell declared on Thursday that is confident that the economy is able to bear two interest rate hikes this year as the dollar and oil prices have broadly stabilized. Against other currencies, the American dollar remains strong.
The WTI quotation had an interesting evolution as on Wednesday, Crude Oil Inventories were published down for the eighth consecutive week. This time the stocks were released at -4.9 million barrels and the first reaction (for a few seconds) of the price was to increase, but soon the price developed a strong enough descendant trend. Why? Because traders are watching several other factors and in this case it mattered that gasoline stocks rose by 0.7 million barrels and distillates products increased by 1.8 million barrels. The WTI quotation fell to 59.60 (inferior region of the lateral movement), while a breakdown of this support may lead the price lower to 59.35, but a breakout of 59.90 would almost reassure a positive tendency towards the superior zone of the range.
Meanwhile, the EURCHF currency pair is struggling to resist the pressure as HSBC sees the quotation going to parity and even lower regardless to Greece. The Swiss Franc’s appreciation is scarcely held under control by the SNB’s Fx interventions. Even if the Hellenic problem gets a solution, there will still be a demand on the Swiss Franc, fact that is pushing Switzerland to the brink of its first recession in six years and is causing the sharpest drop in the CPI. Both the EURCHF and the USDCHF are following descending trends and risk significant slips.
