Greeks May Not Be Able to Stick With Austerity Plan

EUR/USD Technical Analysis Outlook 06.24: Weakness in Global Economy Cause Run to Safety‎

The Euro has posted a 100-pip spike higher during the European session, bouncing up from 1.4200 low after better than expected German Business Climate data, to be rejected at 1.4300, and retreat all the way down to fresh day lows at 1.4190.
The Euro is pushing against 1.4200 (day low), with next potential support levels below here, at 1.4125 (Jun 17/23 lows) and 1.4070 (Jun 16 low). On the upside, resistance levels are 1.4305 (day high), and above here, 1.4345/50 (Jun 22 lows) and 1.4435/40 (Jun 21/22 highs).
Technical indicators show the pair losing momentum, aiming to revisit 1.4130 area: "Euro neck that loses momentum quickly towards 1.4200. Having been capped by 20 SMA in the 4 hours chart, and with indicators below their midlines, bearish short term trend persist as long as below 1.4220 area, heading towards the 1.4130 area, yesterday's low."

FOREX :Technical Outlook 06.23

The USD recovery which started overnight with the fall in cable has continued slowly in Asia with USD/JPY finally finding a bit of strength and EUR/USD triggering stops below 1.4300 only to find the fall stalled by Sovereign bids.

Bernanke dismissed any possibilities of QE3 in his overnight statement and this led to a revival in the fortunes of the USD. EUR/USD started falling in NY after topping out ahead of very heavy selling interest towards 1.4450. Asia opened around 1.4350 and it’s been a gradual slide lower with stops getting triggered below 1.4300 mid-morning. Asian central bank bids around 1.4290 helped stall bearish momentum. Ranges: 1.4283/1.4351
USD/JPY finally moved after what’s seemed like ages. It rallied to an intraday high of 80.64 on USD short-covering sentiment but corporate offers were steady near the highs. Ranges: 80.24/64
Cable has again been weak, drifting gradually lower as the market gets to grip with the possibility of more quantitative easing. Sterling remains weak on the crosses. Ranges: 1.6016/70, EUR/GBP .8910/32
AUD fell in line with the cable and EUR/USD and also lost ground against the NZD. The poor China PMI failed to drive the AUD/USD below strong bids at 1.0530. Ranges: 1.0528/71

EUR/USD Technical Outlook: Mid-Day Outlook

With 1.4290 minor support intact, intraday bias remains cautiously on the upside and further rise should be seen to upper trend line resistance (now at 1.4593). Note that EUR/USD is possibly forming a triangle pattern inside converging range of 1.3969/4939. An upside break out will be mildly in favor as long as 1.3969 support holds. Further break of 1.4695 resistance will be the first signal of up trend resumption for another high above 1.4939. On the downside, though, below 1.4190 minor support will turn bias neutral first. Further break of 1.4073 will flip bias back to the downside for 1.3969 and below instead.
In the bigger picture, EUR/USD is still trading above medium term trend line support from 1.1875 (now at 1.3606) and thus, rise from there should still be in progress. We'd continue to favor the bullish case that correction from 1.6039 has completed with three waves down to 1.1875 already and. Above 1.4938 will target 1.5143 resistance first. Break will affirm the bullish case of long term up trend resumption for another high above 1.6039. However, sustained trading below the mentioned trend line support will indicate that there should at least be one more medium term decline, possibly for below 1.1875, before correction from 1.6039 completes.

Dollar weakens ahead of Greek vote

The U.S. dollar declined against the euro on Tuesday ahead of a key vote in the Greek parliament late in the session that will set the stage for Greece to either receive more bailout funding or head towards defaulting on its debt. Investors expect the former, so see less need to the relative safe-haven status of the greenback or U.S. Treasury’s, which also boosted stocks and commodities. “If the Greek confidence vote this evening passes, the better tone for risk should continue short term,” said Adam Cole, global head of foreign exchange strategy at RBC Capital Markets.

The euro EURUSD +0.55% climbed to $1.4382 from $1.4305 in late North American trading Monday.
The dollar index  DXY -0.32% , which measures the performance of the U.S. unit against a basket of six major currencies, fell to 74.692, compared to 75.043 late Monday.

EUR/USD Technical Analysis: Pushing against 1.4385 highs

Euro Dollar retreat from 1.4340 on Friday found support yesterday at 1.4190m, and the pair bounced up strongly as Greece fears eased, regaining lost ground, to consolidate on Tuesday between 1.4300 and 1.4385 high, which is being tested right ahead of Wall Street opening. Above 1.4375/80 (day highs), the pair might find resistance at 1.4430 (50-day SMA) and 1.4500 (Jun 14 highs) and 1.4550 (Jun 10 high). On the downside, immediate support lies at 1.4300/15 (day lows), and below here, 1.4190 (Jun 20 lows), and 1.4125 (Jun 17 lows). Likewise, the EUR/GBP retreat from Friday's high at 0.8855 bottomed at 0.8790 on Monday before bouncing up and extend on Tuesday to fresh 7-day highs at 0.8875. 

Forex: EUR/USD rebounds above 1.4300

Despite showing substantial weakness in the first half of the day given the failure of eurozone finance ministers to reach an agreement on Greece, the EUR/USD recently is bouncing back from a daily low near 1.4200 and currently trades as high as 1.4320. Writing for the FXstreet.com technical analysis team, Valeria Bednarik reported just prior: "Euro recovered ground in the last hours supported by hopes of an agreement that will give new funding to Greece. EUR/USD is approaching 1.4300 and is about to rise above the price it opened Sunday overnight. A break above could send the Euro higher, probably to test 1.4325/40 as hourly and 4-hours indicators favors the upside ahead of Wall Street opening." Bednarik adds: "Movements are likely to be limit on Monday, unless shocking newshit the wires. To the downside, the area around 1.4190/00 (60 SMA in 4-hours chart) is offering support to the Euro, a break below should trigger a bigger decline, probably to 1.4150/60; levels under are not seen for today but consolidation below 1.42 is likely to weaken the pair for the coming session."

Forex: EUR/USD Weekly Review

The Greek deficit crisis continued to plague sentiments and the EUR/USD might be steered in the coming week by the developments of this situation. In the previous EUR/USD Weekly Review, I mentioned that if the bearish pressure continued, we might see a 1.42. Indeed so, 1.42 was achieved and later served as a support level. From a technical point of view, we may see some consolidation as the currency pair finds its bearing between 1.42 and 1.44. Furthermore a short term down slope trendline is in the immediate price region. SMA 24 = almost flat SMA 48 = almost flat. The Simple Moving Averages above also suggest a technical consolidation as traders struggle to make sense of the currency pair's direction. This is also further suggested as the two moving averages flipped recently. Having said so, we all know that the fundamental reasons are a strong factor in a currency pair's movement too.

EUR/USD Technical Analysis 06.19 Looking For Upside

The pair is due for a volatile week as investors will likely be expecting some sort of resolution to the Greek sovereign debt crisis. The fact that the policy makers have so far failed to agree on how to solve the Greek saga has put considerable pressure on the currency and unless a compromise is found, the pair will continue to head south. Also, Greek PM is expected to seek a vote of confidence this week as he attempts to push through with reforms. In terms of macro-economic data, attention will be on the widely followed ZEW survey, Eurozone Current Account and also the Manufacturing/Services PMIs. Finally, technical studies indicate that support levels are seen at 1.4073, 1.3968 and then at the 21Day Lower Bollinger Band. On the other hand, resistance levels are seen at the 21DMA line at 1.4343 and then at the 10DMA line at 1.4407.

FOREX News: Worse Euro Crisis May Hit Swiss

Big Swiss banks have very little direct exposure to Greece but Switzerland may be affected if a Greek default destabilizes the whole financial system, the Swiss National Bank's vice chairman told a newspaper on Sunday. In remarks similar to those he made at the SNB's monetary policy review on Thursday and in the SNB's annual Financial Stability Report, Thomas Jordan said a domino effect brought about by a Greek debt restructuring likely would cause further upwards pressure on the Swiss currency. Concerns about debts in peripheral Euro Zone countries have repeatedly pushed the safe-haven Swiss franc to record peaks against the euro this year. Swiss exporters have complained their margins are suffering and the SNB has decided to leave rates ultra-low to keep a lid on the rising currency, running the risk of a bubble in the real estate market. "So long as only the peripheral countries are affected, the risk is limited," Thomas Jordan told the newspaper Der Sonntag. "But the big Swiss banks necessarily have many investments abroad, in particular in countries with big financial markets. If the whole financial system were affected, that would naturally have severe consequences for Switzerland." Switzerland had to bail out UBS during the financial crisis after it suffered big write downs and the government is now pushing tough capital standards for UBS and rival Credit Suisse that exceed the Basel III standards. In its report, issued last Thursday, the SNB said the banks' direct exposures to peripheral euro zone countries were relatively low, falling to 46 billion francs in 2010 from 60 billion in 2009, but they could face "considerable losses" if the contagion worsened. Echoing remarks made by SNB Chairman Philipp Hildebrand last year, Jordan said it was in Europe's interest to solve the debt problem quickly and effectively. "We're convinced that the European institutions will take appropriate measures that will prevent an escalation of the crisis," he said. Switzerland is not a member of the European Union but has funded part of the IMF's loan to Greece. "But also Switzerland has a big interest in the debt crisis not escalating. Via the exchange rate and demand for our exports we're very much affected by these developments." Between March 2009 and June 2010 the SNB intervened in markets to prevent an excessive appreciation of the franc against the euro. As a result of its interventions, the SNB ran up its biggest annual loss last year and Hildebrand has faced calls for his resignation.The SNB holds just over 80 percent of its foreign currency reserves in government fixed income. Of its bond holdings, 83 percent are in paper rated AAA, 14 percent in debt with a AA rating, 1 percent has only an A rating and 2 percent is in a category called 'other,' the SNB's website shows. In a separate article, Der Sonntag said the SNB held a very small amount of Greek debt. In January the SNB stopped accepting Irish government debt as collateral in its money market operations and stopped accepting Greek debt more than a year ago