MARKET BRIEFING – LONDON OPEN 16.06.2015
Posted: Tue Jun 16, 2015 4:56 amMORE ON ACFXblog.com
MARKET BRIEFING – LONDON OPEN 16.06.2015
The Greek Finance Minister Yanis Varoufakis has upped the game of brinkmanship by saying that there are no plans to present new proposals.
On the contrary Varoufakis wants there to be further meetings where negotiations can take place. Any new proposals will be presented at the upcoming European Finance Ministers meeting that is being held in Luxembourg on June 18.
With deadlines looming it wold appear that the Greek Premier Alexis Tsipras and Varoufakis are trying to push the negotiations down to the wire in the hope that the Europeans will blink and cave into the Greek demands for debt restructuring.
There is a looming threat of a miscalculation and an accidental Grexit triggered by the attempts of the Greek Government to sow the seeds of doubt in the minds of their European counterparts. Tsipras has decided to put the game theory that Varoufakis is an expert of to the test and hope that the fear of contagion will push the Europeans towards a compromise.
However there has been a hardening of views on the part of the creditors. Donald Tusk the European Union President has only in the past few days by said “There is no more time for gambling. The day is coming, I am afraid, that someone says the game is over.”
The Greek Government was not voted to power with a mandate of negotiate or leave the Euro. In fact the Greek public on the whole what to stay part of the European family and have no wish to enter into new unchartered adventures.
Furthermore the current Greek Government has shown itself to be lacking the technical skills to navigate the introduction of a Drachma MK2. The economic fallout of an introduction of a new currency would lead to an economic meltdown which would lead to Pensioners and Public Sector Employees either not getting paid or seeing their salaries and purchasing power drastically reduced.
The Greek Government has battled against the European demands for further austerity but a re-introduction of the Drachma will bring about a drop in living standards which the SYRIZA administration has battled to avoid.
The current extension to the Greek financial support program ends on June 30. This coincides with the Greek Government having to pay back to the IMF EUR 1.5 billion. Without a new agreement it remains uncertain how the Greek Government can finance this payment.
Although a failure to pay the IMF on June 30 technical does not put Greece into default the lack of money means that every repayment deadline is now turning into a mini crisis. There is another date on the horizon which could make it an uncomfortable summer. This is on July 20 when the Greek Government has to pay back some EUR 3.5 billion to the ECB. This is when the end game finally happens as a failure to payback this money would effectively cut Greece and its banking system adrift from the European Central Bank.
With just over a month to go before the ECB deadline this game of chicken has to either end in an ugly car crash on a compromise will have to be reached. I do not see the Europeans or the IMF backing down on the two key issues of reform of Pensions and the Public Sector. If Tsipras has to swallow the bitterest pill he will ever have to take a referendum or a snap election looms on the horizon.
EURUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.1432
Target 2: 1.1132
Projected range: 0.0150 ATR
Daily control level: 1.1250
GBPUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.5734
Target 2: 1.5466
Projected range: 0.0134 ATR
Daily control level: 1.5485
USDJPY
The intraday technical outlook
Trend 1 hour: Down
Target 1: 124.46
Target 2: 122.34
Projected range: 1.06 ATR
Daily control level: 124.00
USDCHF
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.9411
Target 2: 0.9169
Projected range: 0.0121 ATR
Daily control level: 0.9390
USDCAD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.2427
Target 2: 1.2215
Projected range: 0.0106 ATR
Daily control level: 1.2350
AUDUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.7864
Target 2: 0.7664
Projected range: 0.0100 ATR
Daily control level: 0.7700
GOLD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1198.08
Target 2: 1173.52
Projected range: 12.28 ATR
Daily control level: 1175.30
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1:61.28
Target 2: 57.94
Projected range: 1.67 ATR
Daily control level: 61.50
MORE ON ACFXblog.com
MARKET BRIEFING – LONDON OPEN 16.06.2015
The Greek Finance Minister Yanis Varoufakis has upped the game of brinkmanship by saying that there are no plans to present new proposals.
On the contrary Varoufakis wants there to be further meetings where negotiations can take place. Any new proposals will be presented at the upcoming European Finance Ministers meeting that is being held in Luxembourg on June 18.
With deadlines looming it wold appear that the Greek Premier Alexis Tsipras and Varoufakis are trying to push the negotiations down to the wire in the hope that the Europeans will blink and cave into the Greek demands for debt restructuring.
There is a looming threat of a miscalculation and an accidental Grexit triggered by the attempts of the Greek Government to sow the seeds of doubt in the minds of their European counterparts. Tsipras has decided to put the game theory that Varoufakis is an expert of to the test and hope that the fear of contagion will push the Europeans towards a compromise.
However there has been a hardening of views on the part of the creditors. Donald Tusk the European Union President has only in the past few days by said “There is no more time for gambling. The day is coming, I am afraid, that someone says the game is over.”
The Greek Government was not voted to power with a mandate of negotiate or leave the Euro. In fact the Greek public on the whole what to stay part of the European family and have no wish to enter into new unchartered adventures.
Furthermore the current Greek Government has shown itself to be lacking the technical skills to navigate the introduction of a Drachma MK2. The economic fallout of an introduction of a new currency would lead to an economic meltdown which would lead to Pensioners and Public Sector Employees either not getting paid or seeing their salaries and purchasing power drastically reduced.
The Greek Government has battled against the European demands for further austerity but a re-introduction of the Drachma will bring about a drop in living standards which the SYRIZA administration has battled to avoid.
The current extension to the Greek financial support program ends on June 30. This coincides with the Greek Government having to pay back to the IMF EUR 1.5 billion. Without a new agreement it remains uncertain how the Greek Government can finance this payment.
Although a failure to pay the IMF on June 30 technical does not put Greece into default the lack of money means that every repayment deadline is now turning into a mini crisis. There is another date on the horizon which could make it an uncomfortable summer. This is on July 20 when the Greek Government has to pay back some EUR 3.5 billion to the ECB. This is when the end game finally happens as a failure to payback this money would effectively cut Greece and its banking system adrift from the European Central Bank.
With just over a month to go before the ECB deadline this game of chicken has to either end in an ugly car crash on a compromise will have to be reached. I do not see the Europeans or the IMF backing down on the two key issues of reform of Pensions and the Public Sector. If Tsipras has to swallow the bitterest pill he will ever have to take a referendum or a snap election looms on the horizon.
EURUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.1432
Target 2: 1.1132
Projected range: 0.0150 ATR
Daily control level: 1.1250
GBPUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.5734
Target 2: 1.5466
Projected range: 0.0134 ATR
Daily control level: 1.5485
USDJPY
The intraday technical outlook
Trend 1 hour: Down
Target 1: 124.46
Target 2: 122.34
Projected range: 1.06 ATR
Daily control level: 124.00
USDCHF
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.9411
Target 2: 0.9169
Projected range: 0.0121 ATR
Daily control level: 0.9390
USDCAD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.2427
Target 2: 1.2215
Projected range: 0.0106 ATR
Daily control level: 1.2350
AUDUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.7864
Target 2: 0.7664
Projected range: 0.0100 ATR
Daily control level: 0.7700
GOLD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1198.08
Target 2: 1173.52
Projected range: 12.28 ATR
Daily control level: 1175.30
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1:61.28
Target 2: 57.94
Projected range: 1.67 ATR
Daily control level: 61.50
MORE ON ACFXblog.com