Key Economic Data - Coming Up Today(All Times GMT+2)
The EURUSD fell from the highs above 1.1423 declining 161 pips to touch 1.1262. The pair advanced rapidly from 1.1097 on Monday to the lofty heights of 1.1423 as short-side profit taking led to a two-day surge. Renewed concern about Greek debts and the growing probability of a sovereign default by Greece the pair has surrendered half the gains. The 5yr Greek Credit Default Swaps (CDS) are currently implying a 76% probability of default. Greek's major bank stocks have declined by 40-50% since markets have re-opened on Monday. The Greece vs European stand-off is a game poker based mainly on who has the strongest cards and biggest bluffs. Greece has three main bargaining chips:
- The threat that an exit from the Eurozone will spread contagion to other European nations
- The potential for a €240Billion default to disrupt the Eurozone economy and create serious ripples through the banking system
- A potential alliance with Russia and a role in the gas supply from Russia to Europe
For the European Union there are several main points to consider and which could adversely affect Greece:
- The ECB President Mario Draghi has delivered a QE program capable of mitigating the effect of Greek default and potentially rendering the cost easily manageable
- The ECB and Troika could demand a bank depositor bail-in and this could derail support Syriza and avert other anti-euro parties in Europe coming to power
- Sanctions and/or economic exclusion of Greece by the European Union and its Western allies
- If Russia does not offer Greece a close economic and military relationship this could leave Greece increasingly isolated
Overnight Japanese Retail Sales grew at a slower rate than forecast while the Nationwide House Price Index for the UK also grew but at a lesser rate than expected. The German Prelim CPI is top of the agenda today and expectations are set for a significant deflationary figure with -0.8% CPI versus last month’s 0.0%. The German data will likely affect the EURUSD exchange rate. German Unemployment Change will provide an insight into the health of German labor market and economy. In the US Unemployment Claims and Pending Home Sales are set to show improvement in the economy following on from strong US economic data this week.
EURUSD Support areas include 1.13, 1.12, 1.1150 1.1250, 1.1200, 1.1175, 1.1100, 1.10, 1.0950. Resistance levels above are at 1.14, 1.15, 1.16,1.1650,1.1700, 1.1800, 1.1975, 1.2000, 1.2200, 1.2300, 1.2380, 1.2402.
EURUSD 5 Minute Chart
EURUSD 30 Minute Chart
EURUSD 4 Hour Chart
EURUSD Pivot Point Table