Forex Trading Library

Iran closer to a deal, while Greece is still far

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Talks in Bruxelles seem to have brought the Eurozone closer to a new bailout deal for Greece. While the Hellenic banks are still closed, leftist Prime Minister Alexis Tsipras was told to push legislation through parliament to convince his 18 partners in the Euro zone to release immediate funds. Until Wednesday, six crushing measures must be adopted (including tax and pension reforms) and the entire package should be endorsed by parliament before talks can start. If Greece meets the conditions, Eurogroup finance ministers could meet again on Friday or at the weekend to launch the negotiations.

The EURUSD seems stable above 1.1100, but the situation may deteriorate as German Chancellor Angela Merkel complained about the fact that the trust in the European currency has been lost. The decline of the EURUSD may be sustained further considering the confident approach of Janet Yellen (Federal Reserve): the reference interest rate may still rise this year, the economic fundamentals are sound, movements will however be gradual.

The altitude at which the German index DAX has been trading (close to 11400 points) could be left behind and the European session risks generating a new impulse in the descending channel (technically speaking, the price could be rejected by the upper line of the bearish channel). On the other side, if the quotations marks a new positive gap, or at least a positive opening, the price may go far above 11500 points.

Other concerning demands during the weekend discussions were Germany’s insistence that Greek state assets worth 50 billion euros would be placed in a trust fund in Luxembourg to be sold off with earnings going directly to pay the debts, and the alleged option that Greece takes a five-year “time-out” from the euro unless it accepted and implemented much tougher conditions.

The price of oil may be the subject to dramatic movements this week as Iran and six world powers were close to nailing down a nuclear deal. On the other side, the quotation receives support from the high Chinese crude import figures which prevented prices from tumbling further, and also from the possible positive scenario regarding Greece. The price of WTI opened with a positive gap which brought the quotation down to 51.80. Technically speaking, we could observe the shaping of a lateral movement defined by 53.81 and 50.90, so the price may currently head down to the support level. If the downward movement continues way below the 50.90 support, then we can expect quite a dramatic fall, but if the price is rejected by this local minimum, then we can expect a correction and thus the continuation of the lateral movement.

The Japanese yen and the Swiss franc are gaining momentum as some of the traders feel the need to secure their investments. The price of gold is trading sideways on an H4 interval. We can consider the 1159.36 as the support level, while the resistance is situated near 1164.65. A breakout in any of the two directions could mark a new tendency.

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