Euro is still feverish due to any news concerning Greece. At first, yesterday the message appeared that the ECB had approved prolongation of emergency financing program for Greek banks, and the Minister of Finance of Greece had sent the request to prolong the assistance program. Dijsselbloem announced an intention to hold the Eurogroup session on Friday. On this news the common currency made an attempt to renew weekly maximums. Still, there good news stopped. First of all, it turned out that the Minister of Finance of Greece accompanied his request with some reservations, which are contrary to conditions of assistance to Greece. It almost immediately caused a sharp answer from German officials, which practically refused Greek attempt to get assistance. After that the common currency returned under 1.1400 again.
It can sound ridiculous, but there are still some hopes for euro. We don’t know whether we should cry or laugh because of eternal vaudeville called “Greece”, but participants of the market don’t understand in what this show will result. And it can finish with any consequences. At today’s session of the Eurogroup as well as on the weekend after additional consultations. Almost the whole economic negative is included in current prices, and only Greece remains a constraining factor. At the same time, the reaction to the lack of agreements is still limited. Players still hope for the compromise. Speaking of notable events of this day, we’d like to highlight publication of preliminary indices of PMI business activity in the Eurozone. Forecasts are quite optimistic – most indicators are expected to grow slightly. It can prevent euro from renewed sales. Further everything will depend on the Eurogroup.
Considering local data, we’d like to note today’s publication of the report on retail sales in the U.K. There is uncertainty too. Forecasts aren’t optimistic. However, pound has prospects for continuation of correction, and if the data are better than expected, then pound will succeed to overcome 1.5500 this very day.
Another failed attempt of euro to break through above 1.1440 – 1.1450 made us close the long position for 1.1420 yesterday. Now – out of the market. At this moment we don’t see conditions for opening of short positions. Moreover, we presume that growth potential isn’t exhausted. We’ll take a risk to open long positions only after breakthrough of 1.1450. From our point of view, today’s closure below 1.1300 will bury hopes for continued growth of the common currency in the short term.
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