The new deadline for Greece: Sunday

Jul 08 2015, 6:53 am
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Euro zone members have given Greece until the end of the week to come up with a proposal as European Council President Donald Tusk said “tonight I have to say loud and clear that the final deadline ends this week”. European leaders aren’t totally confident that this time they will agree a form of rescue package which would safe Greece, but for sure there hasn’t left much time for negotiation. Even if banks remain closed, French President Francois Hollande said the European Central Bank would ensure that Greek banks had the minimum necessary liquidity to stay afloat until Sunday.

EURUSD is relatively calm as it managed to close the last session above 1.10000. The American dollar, together with the Yen and Swiss Franc have advanced as traders started to really believe that Greece can exit from the Euro zone. The German index DAX has left behind many negative gaps which was not able to cover, thereby ingraining a strong downward trend. The currency is struggling to stay in the 10900 region, but a breakdown of 10870 would push the price down to the 10800 support level, or even lower to 10740 points.

The Central Bank of Australia decided on Tuesday to maintain the interest rate at 2% as inflation seems to remain consistent with the target, home prices rising strongly in Sydney and the monetary policy is set to remain accommodative. AUDUSD is strongly depreciating and is threatening the 0.7400 support level. A breakdown would take the quotation down to 0.7311 and 0.7180 (the next significant support levels, which could make problems to the decline of the price).

USDJPY chart is shaping a descending trend, but recently the price could not break the 123.85 support level. Given the fact that the Japanese yen is being demanded in such an unsecure financial environment, a breakdown of 123.85 could easily send prices down to 121.60, 121.30 and 121.00.

The price of oil is consistently declining as the WTI is trading down to 52 dollars per barrel and the Brent price fell to 56.50 dollars. Market participants seem to be more concerned about the Greek debt crisis and China’s stock market turmoil than the drop in the U.S. inventory expected to be reported today. According to the API report, the US crude oil inventories fell by 958K in the last week. The market consensus ahead of official EIA data shows decrease in inventories by 489K barrels.

Gold and silver had interesting evolutions yesterday. As the US and German bonds were surging (yields were tumbling) and European stock and bond markets were also falling, the prices for gold and silver were depreciating (1147.95 for gold and 14.672 for silver) as it appeared margin calls were mounting and forcing unwinds accelerate across markets. A breakdown of the local support level would determine the continuation of the descending trends.

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