Could Greece Exit the EU?

The euro continued its slightly downward trend as concerns rose in the European Union regarding the possibility of having Greece forced to exit the EU. These fears escalated after the Greek government unexpectedly decided to reschedule the parliamentary vote to this week, instead of February 2015. The failure to elect a new leader would threaten the entire European economy, leading to an unknown impact.

Elsewhere, the USD received better than expected industrial production data, which added more demand on the currency.

Here are the major Resistance (R) & Support (S) levels of the EUR/USD:

S2 S1 Pivot Point R1 R2
1.2309 1.2380 1.2450 1.2545 1.2640

As for today’s figures, starting with Germany, the German Manufacturing Purchasing Managers' Index (PMI) is scheduled for release; measuring the activity level of the purchasing managers in the manufacturing sector. A reading above 50 indicates an expansion in the sector; while a reading below 50 indicates a contraction in the sector. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of the overall economic performance.

Ø Forecast: 50.4
Ø Previous: 49.5

A higher than expected reading should be taken as positive for the EUR, while a lower than expected reading should be taken as negative for the EUR.

As for the U.K., Mark Carney, Bank of England’s (BOE) Governor, is expected to speak today. As head of the BOE's Monetary Policy Committee (MPC) which controls short term interest rates, Carney has a huge influence over the sterling's value. Traders scrutinize his public engagements for clues regarding future monetary policy. His comments may spark a short-term positive or negative trend.

Then, the Consumer Price Index (CPI) will be released; measuring the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.
Ø Forecast: 1.2%
Ø Previous: 1.3%

A higher than expected reading should be taken as positive for the GBP, while a lower than expected reading should be taken as negative for the GBP.

Moving back to Germany, the German (ZEW) Economic Sentiment Index is scheduled for release; gauging the six-month economic outlook. A level above zero indicates optimism; while a level below zero indicates pessimism. The reading is compiled from a survey of about 350 German institutional investors and analysts.
Ø Forecast: 20.8
Ø Previous: 11.5

A higher than expected reading should be taken as positive for the EUR, while a lower than expected reading should be taken as negative for the EUR.

As for the U.S., the Building Permits announcement will be released; measuring the change in the number of new building permits issued by the government. Building permits are a key indicator of demand in the housing market.
Ø Forecast: 1.060 M
Ø Previous: 1.080 M

A higher than expected reading should be taken as positive for the USD, while a lower than expected reading should be taken as negative for the USD.

We wish you luck in your trading activities.

Disclaimer: The prices and news mentioned in this outlook are absolutely no guarantee of future market performance. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades. Engaging in CFDs or Spot FX carries a high risk to your capital. You should not engage in this form of investing unless you understand the nature of the Transaction you are entering into and the true extent of your exposure to the risk of loss. Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which the trade is based.