The riskier assets had a significant increase yesterday as expected Greek rescue plan was finally approved. The EUR / USD rose over 100 pips before stabilizing after the deal was announced, standing as high as 1.3291. Today, traders should still pay attention to news from the euro zone. Analysts warn that there is still the possibility that Greece could stop paying its debt next month. Any negative listing on the Greek economy today, can cause the euro has a bearish reversal.
Business News
USD – USD falls after reaching agreement on the Greek debt
The U.S. Dollar began the week on a pessimistic note, as the risk appetite of investors amid rising hopes that Greece received its long-awaited rescue package. That trend continued throughout the day and overnight trade, after the Greek rescue deal was approved. The EUR / USD rose to just below 1.3300 level before riding a slight downward correction. The AUD / USD soared to the level of 1.0815 before correction itself during operations at night. The pair is currently trading at 1.0735.
As of today, traders will continue to monitor the news of the euro area to the ads about Greece and its current debt issues. Despite the rescue package, it is still unclear whether Greece will be able to avoid defaulting on its debt next month. Other eurozone countries, like Portugal, also have significant financial problems that could limit the euro’s gains in the long term. With respect to the U.S., has seen a number of recent signs that show this on the road to economic recovery. Analysts warn that recent developments in the euro could be severely limited, if the euro zone economies falter, while the U.S. continue to grow.
EUR – The EUR started the week bullish
The euro extended Friday’s upward momentum throughout the day yesterday, as investors poured on riskier assets to the approval of the Greek rescue package. Upon approval, the euro continued to advance against the currencies as safe-haven U.S. dollar and the Japanese yen. While the EUR / USD took their earnings just below the 1.3300 level in EUR / JPY continued to move this over night. The pair is currently trading just below 106.00, up over 100 pips since the agreement was announced Greek.
Today, traders should note that any pessimistic news in the euro area has the potential to adversely affect the euro. Greece is in a very fragile, and still remains to be seen which can pay off your debt. It is feared that the austerity measures that Greece has promised to carry out a rescue plan change could cause the country to fall into recession. It is clear that the euro area still has a long way to go before recovering financially. This means that the euro gains made last night could be short lived.
JPY – EUR JPY gains achieved through increases in risk taking
The yen had significant losses against the euro yesterday, after positive news from the euro zone that led investors to abandon the safe-haven assets. At the same time, the USD / JPY hit resistance just below the 80.00 level, which was followed by a slightly bearish correction. The pair spent much of the day hanging around the 79.45 level.
As of today, operators must monitor the situation in the euro area, since it is likely to be the driving force behind risk appetite. In addition, key indicators from the United Kingdom and Canada, could influence the market sentiment. Positive indicators may cause the yen extended its losses against riskier currencies like the euro and Australian dollar.
Oil – Oil started the week with a bullish note
Oil prices soared close to $ 2 a barrel yesterday, after fears of supply as a result of increased tensions in the Middle East. Specifically, the Iranian threats to cut oil exports to other Eurozone countries, plus France and the United Kingdom caused prices to make themselves significantly higher during the day. In addition, positive news from the euro zone rose significantly risk-taking, which helped to raise the price by about $ 106 a barrel.
As of today, operators must monitor the situation in the Middle East. Tensions between Iran and the West remain the driving force of changes in oil prices in the market. Any escalation could cause the goods to extend its upward trend even further.
Technical News
EUR / USD
Most long-term technical indicators place this pair in neutral territory, which means they still do not know a definite trend for this week. The only exception is the Slow Stochastic on the weekly chart, where it has formed a bearish cross. Traders should keep an eye on the relative strength index on the same graph. In case of moving in overbought zone, a downward correction to take place.
GBP / USD
The Slow Stochastic on the weekly chart has formed a bearish cross, indicating that the downward movement could occur in the coming days. This theory is supported by the Williams index on the daily chart, which is currently hovering around the level of -20. Going short might be a good choice for this couple.
USD / JPY
After several weeks of upward movement, technical indicators now show this pair in overbought territory. The Williams index on the weekly chart has crossed into overbought territory and is now leaned down. Meanwhile, the relative strength index on the daily chart, has remained stable in 90, indicating that the pair is out of upward momentum. Going short might be the best option for this couple.
USD / CHF
The Slow Stochastic on the weekly chart we see that it has formed a bullish, indicating that the pair could see an upward movement in the coming days. That said, most other indicators in the long run put this pair in neutral territory. Traders if they wish, can take an approach of wait and see what happens in the pair.
Letter of the Day
AUD / JPY
On the daily chart, the percentage of Williams is about to level -20, indicating that a downward movement can occur in the near future. The Slow Stochastic on the same chart has formed a bearish cross, another sign that the pair could see a change during the day today. Forex traders can go short in their positions ahead of a possible fall.
Analysis offered by Forexyard
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