Key Economic Data - Coming Up Today(All Times GMT+2)
The EURUSD slumped to a new low point of 1.2124 following the unsuccessful attempt by Prime Minister Samaras to gain approval for his choice of President Dimas. The pair had traded around the 1.2190 level prior to the release and held up well in the aftermath of the failed vote reaching 1.2220. Greek stocks declined heavily with the benchmark Index ASE falling as much as 11% at one stage before closing 3.9% lower. Spanish and Italian stocks also declined as these two nation's could be next in line for contagion if Greece falls into turmoil. Following an announcement by the IMF (Internation Monetary Fund) that it will interrupt its funding and bailout programme in contribution with the ECB until a new government is in place. It was made clear that this would not affect the short term finances of Greece although it was clear message that the IMF was troubled by political developments in Greece and the decison expressed these fears and served as a warning to Greece that developments were being closely followoed by their lenders. German Finance Minister Schaeuble re-iterated that Germany expects Greece to continue its path of reforms and adhere to past agreements regardless of the shape of the new Greek government. The EURUSD rebounded early this morning reaching as high as 1.2190 while the USDJPY fell below 120 for the first time in a week declining all the way to 119.18 from 120.80 overnight. Crude Oil fell to a new five year low at $52.66 a barrel and has lost 50% of its value since June this year.
Failure to reach a positive outcome means a forced early election and an increased possibility that left-wing Party Syriza and Alexis Tsirpas will come to power. At present Syiza has 29.9% popular support vs 23.3% for Samaras' Nea Dimokratia which is second in poularity. Syriza has outlined anti-EU policies including supporting an exit from the EU common currency, renegotiating the bailout and memorandum with Troika and renegotiating the country’s foreign debts. Goldman Sachs has implied that failure to elect a new President within the three attempts could lead to a Cyprus like Bank Depositor Haircut and bank bankruptcies. This outcome could create havoc for the Euro currency and the European Union with fresh discussion of a Grexit leading to contagion in other member states. The outcome sets the trend for early 2015 with the failure to elect the President leading to a confidence crisis and stability concerns in the Eurozone.
EURUSD Support areas include 1.2125, 1.2100, 1.2000, 1.1970, 1.1900, 1.1850. Resistance levels above are at 1.2300, 1.2380, 1.2402, 1.2444, 1.2500.
EURUSD 5 Minute Chart
EURUSD 4 Hour Chart
EURUSD Pivot Point Table