The Real Threat from Spain’s Corruption Scandal
Investors worried about Spain’s political stability have been dumping their Spanish holdings and pushing up the country’s borrowing costs after the eruption late last week of a corruption scandal involving Prime Minister Mariano Rajoy. Until now, the government’s durability had been one of the few advantages that Spain held over fellow euro-area problem- case Italy, a country that has seen almost as many elections as Christmases over the past few decades and is about to stage another. In reality, the likelihood that the Rajoy scandal will force the collapse of the current right-of-center government is slim. But investors are right to be concerned, because political stability involves more than the survival of a country’s government — it also requires the trust of the electorate in the institutions that govern them. Allegations of corruption at the highest level are corroding that trust in Spain.
On Jan. 31, the Spanish newspaper El Pais published copies of what it said were ledgers from secret accounts held by Luis Barcenas, the former treasurer of the ruling People’s Party, which revealed the existence of a party slush fund. The newspaper said 7.5 million euros in corporate donations were channeled into the fund and allegedly doled out from 1997 to 2009 to senior party members, including Rajoy. The party has denied wrongdoing in a statement, and Rajoy reiterated that position over the weekend and again on Feb. 4, during a news conference with German Chancellor Angela Merkel.
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Forex Economic Calendar
2013-02-14 07:00 GMT | Germany. Gross Domestic Product n.s.a (YoY) (Q4)
2013-02-14 09:00 GMT | E.M.U. ECB Monthly Report
2013-02-14 10:30 GMT | E.M.U. Gross Domestic Product s.a. (YoY) (Q4)
2013-02-14 13:30 GMT | United States. Initial Jobless Claims
Forex News
2013-02-14 05:29 GMT | EUR/USD, sellers negate the 1.35 handle
2013-02-14 04:56 GMT | GBP/USD stalls the fall ahead of 1.5500
2013-02-14 03:57 GMT | USD/JPY still around 93.50 despite BoJ
2013-02-14 03:30 GMT | AUD/NZD feels selling pressure below 1.2250
TECHNICAL ANALYSIS
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EURUSD
HIGH: 1.34553 | LOW: 1.33823 | BID: 1.33935 | ASK: 1.33943 | CHANGE: -0.44% | TIME: 09:40:06
OUTLOOK SUMMARY: Down
TREND CONDITION: Downward penetration
TRADERS SENTIMENT: Bearish
IMPLIED VOLATILITY: High
MARKET ANALYSIS – Intraday Analysis
Upwards scenario: Retail traders sentiment is currently on the bearish side however further price appreciation is possible above the resistance at 1.3414 (R1). Any upside actions above this point would then be targeting our resistances at 1.3433 (R2) and 1.3452 (R3). Downwards scenario: As long as price stays below the moving averages our medium-term outlook would be negative. Our next support level is seen at 1.3377 (S1). Any extension lower is being able to drive market price towards to our targets at 1.3359 (S2) and 1.3341 (S3) on the long run.
Resistance Levels: 1.3414, 1.3433, 1.3452
Support Levels: 1.3377, 1.3359, 1.3341
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GBPUSD
HIGH: 1.55425 | LOW: 1.55072 | BID: 1.55121 | ASK: 1.55129 | CHANGE: -0.18% | TIME: 09:40:07
OUTLOOK SUMMARY: Down
TREND CONDITION: Down Trend
TRADERS SENTIMENT: Bullish
IMPLIED VOLATILITY: High
Upwards scenario: After dipping lower yesterday we see potential of downside tendency recovery in near-term perspective. Next on tap resistance level at 1.5543 (R1) mark. Break here would suggest next targets at 1.5568 (R2) and 1.5593 (R3).Downwards scenario: On the other hand we still keep the downside extension in focus. Risk of further market depreciation is seen below the support level at 1.5502 (S1). Loss here would enable initial targets at 1.5480 (S2) and 1.5468 (S3).
Resistance Levels: 1.5543, 1.5568, 1.5593
Support Levels: 1.5502, 1.5480, 1.5468
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USDJPY
HIGH: 93.711 | LOW: 93.132 | BID: 93.559 | ASK: 93.564 | CHANGE: 0.14% | TIME: 09:40:08
OUTLOOK SUMMARY: Neutral
TREND CONDITION: Sideway
TRADERS SENTIMENT: Bearish
IMPLIED VOLATILITY: Medium
Upwards scenario: Market comfortably moves in sideways mode on the hourly chart. If USDJPY gains momentum on the upside and rose above the resistance at 93.65 (R1), we expect next resistance to be exposed at 93.79 (R2) and 93.94 (R3). Downwards scenario: If the price failed to overcome our next resistance level we expect market easing below the support level at 93.39 (S1). Loss here would shift our technical outlook to the bearish and enable initial support levels at 93.24 (S2) and 93.09 (S3).
Resistance Levels: 93.65, 93.79, 93.94
Support Levels: 93.39, 93.24, 93.09
Source: FX Central Clearing Ltd,( Forex ECN Brokers List | Auto Forex Trading Account | FXCC )