EUR/USD
It has been a volatile session. The Euro rallied in early Europe after it appeared that
Papandreou was losing the support of his own party following his one man call for a
referendum on the EU. The ECB then cut rates by 0.25%, which caught the market
out and the Greek situation continues to remain very fluid. A confidence vote in the
Greek parliament later today could all change things yet again, so best not to dwell
on the current situation except to say that the latest word is that Papandreou has
raised the possibility of dropping the referendum, given certain undertakings by the
opposition and the possibility of a coalition government….It is very hard to keep up
with!
All things considered though, the Euro has behaved remarkably well. It has been a
good day all round for riskier assets as evidenced by the move in equities which has
seen the S+P finish up 1.5%. The DAX and CAC40 were up close to 3%
Technically we have bounced from today’s 1.3656 low, post the rate cut, to as high
as 1.3854, 38.2% of the down move from 1.4250/1.3605.The 4 hour charts continue
to hint that dips will remain well supported for the time being but the dailies are
still pointing lower, albeit with slightly less vigour than yesterday.
All in all it looks likely that we are going to continue to have more choppy
conditions ahead of us with direction to be provided by the NFP later on today. The
Initial Jobless claims fell by 9k today and expectations are for the NFP to rise by 95k
with the Unemployment rate to remain unchanged at 9.1%.
For today’s session, look to 1.38/1.39 to cover it, at least until we see any game
changing statements from Europe/G20.
Other Economic data today will include EU PPI and German Factory orders.
Good luck, Good w/e.
Latest: UK Telegraph reporting the referendum is called off and that the vote of
confidence will be at 10PM GMT…Gotta love a moving market!
AUD/USD
Just when the AUD looked as though it was down and out, the ECB came riding
to the rescue, cutting rates, as Europe slides into recession, and boosting risk
assets. It is a very confused world! The AUD liked it though and it hasn't looked
back from its lows in early Europe of 1.0202 to reach a high so far of 1.0446. A
slightly less negative view from Europe today has assisted, and equity markets
are all noticeably higher, with both European and US Equities posting positive
sessions. Don't get too euphoric though. This could all turn around in a big
hurry. At this point, best to assume we are in for a range trade through Asia,
followed by the no-confidence vote in Athens and finally the Non Farm Payrolls
from the US, which will provide direction.
The charts are mixed and not telling us a whole lot. As far as Asia is concerned a
consolidative range of 1.0380/1.0450 looks to be expected. A break above
1.0450 would lead to a test of the 50% Fibo resistance at 1.0475, but this looks
unlikely a present. To the downside a break of 1.0380 would see a move back to
1.0330 support. As its Friday, take it easy and look for a reasonably quiet
session in Asia. No one has a clue what the outcome will be in Europe so it
would seem that interest ahead of tonight’s no confidence vote in Greece
should be reasonably light. With the S+P closing +1.88%, it would be reasonable
to assume that dips will find reasonable support in line with today’s risk-on
view. Be very flexible though. Good w/e.
Latest news has it that Papandreou has offered to stand down and form a
coalition government….too hard to keep up with !
