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I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!
Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>
You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.
You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.
Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>
Yours 'Forexly',
Cliff
Simon Denham's Daily Market Comment
Greeks have voted to take their medicine and so markets are rallying in relief that a rejection of the vote has not lead to the country’s exit from the eurozone. Their politicians were able to persuade the majority that the alternative will be far more painful if they were not to pass the austerity measures and now Europe and the IMF will want to see their words put into actions. There are still negotiations that need to be completed such as actual sign off by the troika and then agreement on the private sector’s bond write down.
If Greece does actually stick to an approved plan then the resultant recession will be long and hard, but as reminded by the politicians the electorate needs to appreciate that such drastic action is required in order to get the country back on the road to being more competitive and ultimate recovery if they want to remain in the eurozone. If the vote hadn’t been passed then exit from the euro club would have been imminent. The return to the Drachma would have damaged the country’s dignity even more than it already has been, but the resultant recession would have been far deeper and longer than what’s being put on the table today.
The rest of Europe will be unlikely to call for further austerity, but will be watching very closely to ensure that in the run up to the elections in April and beyond the promises are implemented. At the moment few know what a new parliament in Greece after April will look like and there’s always the chance, as we’ve seen before from Greece at the end of last year, for a politician to pander to the populist vote in order to get in power and not actually implement the measures just passed by their parliament. One thing is for sure that all this vote does is buy time and doesn’t guarantee the country is immune to default or exit in the future.
But for now the news comes as a relief for investors who are pushing risk assets higher. The FTSE has recovered back to 5900 at the time of writing having gapped higher on the open. Having seen a minor break to the downside on Friday once again the buyers have seen the weakness as a buying opportunity and we are firmly back in the narrow trading range of last week.
Any traders who went long of the euro on Friday are likely to be thanking the Greek parliament for passing approval of the austerity measures. The news that Greece are likely to a second bailout encouraged traders to move out of any safe haven yen and dollar positions, causing a spike in the single currency as of last night. This has continued into this morning and EUR/USD is trading around 1.3275. The taste for equities and risk taking today, could see the euro move higher in line with this sentiment, but the bulls need to shake out the bears around the 1.3300 level which remains the major near term hurdle.
Gold was fighting a losing battle against the greenback during Friday’s trading as investors cashed in on profits ahead of the weekend. Another reason for the slump was the requirement to cover margin calls in the falling equity markets, meaning that traders were closing out of the precious metal to free up money. No one will forget the lingering issue with Greece and this means that risk adverse participants have been pushed out to the sidelines while the volatility remains, despite gold being used as a hedge in previous times of trouble. So by the end of the day, the yellow brick had shed 8.1 bucks to close at 1721.3, which at time of writing has been reversed and now the level sits at 1731.1.
Much like gold, a higher US dollar combined with a lower equity market meant that crude struggled to make ground in Friday’s session. Adding to the fire was a lower revision in the global demand for oil in 2012 by the International Energy Agency, also mentioning that a loss on Iranian crude supplies can easily be replaced. Currently Brent sits at 117.67.
