Eurogroup To Give Greece Two More Years

A quiet start to the trading week with US Traders away for Veteren’s Day. The main focus was the Greece Austerity vote which was passed successfully. The EUR/USD struggled to rally however with details of the Trioka report and the release of bailout funds. Looking ahead, Fed Budget released.

The Euro (EUR)
Traded in a 50 point range with a rally from 1.2700 faded later in the US session. The successful Greek Budget vote helped spark the brief rally but then ongoing delays to the release of actual aid is weighing. The Troika seems to be disagreeing on whether to give Greece more time and how this would be done.

The Sterling (GBP)
Remained weak with GBP/USD breaking through 1.5900 and continuing to grind lower in Asia today. The 200DMA is close at 1.5850 and could provide some support. GBP Crosses are weighing with GBP/AUD slumping and EUR/GBP back above 0.8020. Looking ahead, October CPI forecast at 2.3% vs. 2.2%. November German ZEW Survey forecast at -9.8% vs. -11.5%.

The Japanese Yen (JPY)
The yen is gathering support grinding above Y79.60 in Asia Tuesday. Many of the larger players and hedge funds are taking the increasing threats from the BOJ/MOF more seriously this time and with Q3 GDP slipping into negative we could see action sooner than later. EUR/JPY is stable at the Y101 but is closely watched for market sentiment.

Australian Dollar (AUD)
The aussie was well supported with a reconfirmed AAA rating and strong inflows into Australian Bonds. China’s Trade balance surged on exports and received lots of attention over the weekend with many analysts seeing this as evidence of a soft landing. EUR/AUD is grinding lower with the high yield and safety making the Australian dollar very attractive to long term investors. Looking ahead, October Australian Business Confidence.

Oil and Gold (XAU)
Gold ran out of steam near $1738 and we fell back $10oz on profit taking. US Traders return and have been bullish of late could provide support. OIL/USD bounced to $86.50 but found sellers once again and we have returned to the $85 with downside eyed.

Pairs To Watch
EUR/USD: Greece Delay’s Spooking investors

USD/JPY: Buyers getting more aggressive after Japanese Jawbowning

TECHNICAL COMMENTARY