MARKET BRIEFING – LONDON OPEN 27.07.2015
This Tuesday Greek government will begin the negotiations on the new 86 billion euro bailout agreement, which was previously approved with the two parliamentary votes with the latest last week.
Even though the short term agreement between Greece and its international creditors was settled ten days ago, Greek stock exchange remains closed for the 5th week.
The official Troika representative groups have arrived in Athens to conclude the bailout talks. The heads of the European Commission, European Central Bank and International Monetary Fund are expected to arrive a few days later.
The most belligerent issue for now is whether the Greece will need to carry out additional reform measures to receive the funds under the new bailout programme. The Athens are resisting strongly to that.
The negotiations deadline is set to be August 20, when Greece will need to pay another 3.2 billion euro on ECB held bonds.
Last week the banks were reopened, however would only provide limited service with the capital controls still there. Greek account holders are limited in their cash withdrawal to 420 Euro per week, which according to officials could last “for month”. Greek government request to lift the limits on trading were rejected by the European Central Bank last Friday.
The measures were implemented to avoid a likely bank runs, which could cause illiquidity and consequent economic collapse to the very fragile economy of the Balkan member. The large deposit outflow was seen in the country’s banks just before capital controls were introduced. It is expected that the only completion of the new bailout aid agreement will restore the confidence in the Greek banking system.
Large number of the businesses as a result have suffered significant sales declines, as they were unable to pay their suppliers. In addition, the recently increased VAT and reduction in pensions payments will lessen the population’s spending power even further.
Troika is seen negatively by the general Greek population, as it is believed its harsh austerity measures caused the economy to decline sharply and unemployment to soar to the record-high levels.
In the recently published report by the IMF, it warned that “Although market reaction to the recent reform package passed in Greece has been broadly positive, further episodes of significant uncertainty and volatility arising from the situation cannot be ruled out.”
EURUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.1098
Target 2: 1.0864
Projected range in ATR’s: 0.0117
Daily control level: 1.1215
GBPUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.5622
Target 2: 1.5402
Projected range in ATR’s: 0.0110
Daily control level: 1.5670
USDJPY
The intraday technical outlook
Trend 1 hour: Range
Target 1: 124.56
Target 2: 122.88
Projected range in ATR’s: 0.8375
Daily control level: 123.00
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.9705
Target 2: 0.9519
Projected range in ATR’s: 0.0093
Daily control level: 0.9400
USDCAD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.3135
Target 2: 1.2939
Projected range in ATR’s: 0.0098
Daily control level: 1.2675
AUDUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.7353
Target 2: 0.7183
Projected range in ATR’s: 0.0085
Daily control level: 0.7490
GOLD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1115.23
Target 2: 1083.08
Projected range in ATR’s: 1.4520
Daily control level: 1160.00
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1: 56.28
Target 2: 53.38
Projected range in ATR’s: 1.4520
Daily control level: 51.00
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