Greek officials have announced that they have reached consensus with the Eurogroup. In exchange for the continued funding of Greece for another few months, a list of demanded reforms has been drafted. The leaders are still working on the solution of the bailout program extension, but the result seems to be promising and recent polls shows that the domestic support ratio of Syriza-led government does not fall significantly even after they gave up on almost every promise they had pledged to voting Greek public.
The Euro fell from highs of near 1.1380 to 1.1295 and was trading near 1.1335 earlier this morning. The sideway continues within the range between 1.1260 and 1.1450.
Sterling experienced a relative strong rebound against the Dollar yesterday. It rose from the day low of 1.5333 to the 18th February high of 1.5480 during the European session. The 1.5480 resistance seems close to breaching. If so, the 1.56 level above will be the next target for bulls.
Fed chairwoman Yellen will make a testimony on the Semi-annual Monetary Policy Report before the Senate Banking Committee today. I feel I have to alert the traders who are still betting on a higher US Dollar that the reversal risk is increasing. Firstly, Yellen always tends to be dovish on monetary policy. Although it is almost a certainty that Fed may raise interest rate during the year, a dovish statement will still affect the market heavily. Another sign is that the bull positions on the USD has been at the historical high for so long and yet the rise of USD has ceased for a while, all implying a major reversal is in the works. Traders should be prepared for this situation.
Turning now to the stock markets, the Nikkei Stock Average gained 0.73% to 18467, refreshing the highest level in 15 years. Australia 200 rebounded 0.45% to 5908. In European markets, the UK FTSE 100 was down 0.1%, the German DAX climbed 0.73% and the French CAC 40 Index gained 0.65%. US stock indices remained mostly unchanged. The S&P 500 closed 0.03% lower at 2110. The Dow lost 0.13% to 18117, and the Nasdaq Composite Index rose 0.1% to 4961.
On the data front, UK Inflation Report Hearings will be released at 21:00 AEDST. After midnight, ECB President Draghi will speak at 1:00 AEDST and Fed Chairwoman Yellen will follow at 2:00 AEDST.