Business & Finance

Greece is the word as Eurozone remains firmly in the spotlight

Greece is the word as Eurozone remains firmly in the spotlight
May 9th, 2012
Author: Mike Paterson

Mike Paterson’s daily Forex brief

The Euro faces a tough examination over the next few days and weeks as recent complacency gives way once again to real fears of political and economic melt-down.

Buy gold and silver online - quickly, safely and at low prices
After accepting a mandate to create a multiparty administration following inconclusive elections, Alexis Tsipras leader of the Greek communist-coalition party Syriza yesterday sent shockwaves through financial markets by announcing that the pledges Athens had made to secure rescue funds from the EU and IMF were null and void.

Markets went into panic mode with EURUSD dropping rapidly below 1.3000 again after a decent bout of consolidation, dragging with it Euro pairs including EURJPY and EURGBP which seems to have now found a cap around the 0.8065 pivot level. (GBPEUR support around 1.2400).

EURUSD now has a key barrier option support line at 1.2950 but plenty of sellers around 1.3000 and there is genuine belief that we could be heading to 1.2700 in the short term, a not unrealistic view given the fallout possible.

Concerns over Greek withdrawal from the Euro would create a run on the banks in a bid to get Euros out before any devaluation back to Drachma, and this in turn would be highly likely copied in other Eurozone countries under scrutiny such as Spain and Portugal.

Such fears are well founded and if realised would create an unstoppable meltdown on the banking system.

Greece therefore really is the word.

The Pound and Greenback continue to be the favoured sons while the Aussie dollar is most certainly not with GBPAUD back above 1.6000 and AUDUSD only now just starting to find a few buyers after a rapid fall to 1.0050. Aussie Unemployment tonight will be keenly awaited.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

Stocks and Gold continue to look a bit sick too with the latter dropping through key support around $1,610 and seemingly on its way to the target of $1,550, which I mentioned some weeks ago when we fell back through $1,650.

Little in the way of data today but there’s plenty of Eurozone bond auctions to keep us on our toes not to mention the raft of on-going rhetoric.

And yesterday in my sports round-up I was berated over my failure to mention Harlequins finishing at the top of the rugby union Premiership, remiss of me given that many of my City years were spent around the club. But it’s not really over yet is it, as we now have the Premiership play-offs but hey, always glad to give credit where credit is due to all those down at Langhorn Drive. Come on you Mighty Quins!

Today’s Data:

15.00-US- Wholesale Inventories

02.30-AU- Australian Unemployment

Agree or disagree? Then please leave a comment in the box below or contact me by e-mail.

Mike ‘Oscar’ Paterson has been in the Forex trenches for nearly three decades working as a senior Spot trader in London at UBS, Chief Dealer FX at the State Bank of Victoria and in charge of Spot CHF at Credit Suisse with a daily turnover in excess of $1.5 billion. Mike now works as an independent consultant providing a fully bespoke service to the corporate and private sectors in physical FX delivery as well as guiding those who wish to improve their currency trading. Mike also presents seminars and workshops and writes for a number of publications.
To contact Mike please call +0044 (0) 1732 700383 or email mike.paterson@economicvoice.com
The views expressed above are those of the author and should not be taken as investment advice. MSP Foreign Exchange Services will have no liability for, or to, any persons executing trades based on the content above.

Interesting? If so please COMMENT BELOW & Like, Tweet and +1 it to your friends!!

---------------------------------------------
Visit our Amazon Store
Get our FREE newsletter HERE
The Economic Voice on Google+
Why not use one of our Widgets on your website?
Click here to get Oil and Energy Insider
---------------------------------------------

Comment Here!

comments

Tags: , , , , , , , ,