Eurozone Headlines Dominate, Euro Slips on Spain Worries

The headlines from the eurozone started to dominate the markets once again.

The European crisis is far from solved and those concerns are weighing on the market. Commodity currencies have been resilient lately but risk sentiment is very fragile and very volatile. AUD and NZD will probably follow EUR and turn south.

Meanwhile, the Troika (the European Central Bank, the International Monetary Fund and the EU Commission) will meet in Athens to determine the fiscal position of Greece, which has been struggling to hold to obligations tied to 240 billion euros  of rescue funds over the past two years. The IMF said that it will not commit more money to Greece and will make a decision on its next disbursement in late August at the earliest based on the findings.

In addition, there were more bad news over the weekend from Spain, the fourth-largest economy in the eurozone, when another region Murcia said on Sunday it would seek government financial assistance, while media reported half a dozen governments were ready to follow in the footsteps of Valencia.

The recent price action shows that most investors believe there is nothing good happening in the Europe and that keeps the common currency under pressure, especially the first half of the week when we have eurozone data. European Central Bank President Mario Draghi is still optimistic though. President Draghi said that the euro was not in danger despite some analysts’ worse case scenarios. He said “They do not recognize the political capital that our leaders have invested in this union and Europeans’ support. The euro is irreversible. All movement towards financial, budgetary and political union is for me inevitable and will lead to the creation of new supranational bodies”.

The Asian stock markets fell sharply today as Europe debt concerns soured the investors’ sentiment. NIKKEI closed the day at 8,508.32, previous close was 8,669.87. HANG SENG closed at 19,053.47, previous close was 19,640.80.

EUR/USD is trading at 1.2126 by the time of typing and for today resistances are located at 1.2145 and 1.2193. Support levels are 1.2092 and 1.2000.

GBP/USD is at 1.5534. Resistance levels are located at 1.5551 and 1.5588. Supports are located at 1.5493 and 1.5460.

USD/CHF is trading at 0.9901 by the time of typing and for today resistances are located at 0.9909 and 0.9946. Support levels are 0.9865 and 0.9825.

AUD/USD is trading at 1.0291. Resistances are located at 1.0310 and 1.0360. Support levels are 1.0270 and 1.0200.

Data from the Commodity Futures Trading Commission (CFTC) showed that speculative traders kept their bet on the Euro’s fall almost unchanged from last week. CFTC’s data also showed that traders increased their open short CHF position by 32% from a week earlier to reach a net of $3 billion. They also increased their open long JPY position by 25% to reach a net of $1.8 billion.

CoT Chart EUR
CoT Chart GBP
CoT Chart CHF
CoT Chart JPY


Leave a Reply

Your email address will not be published. Required fields are marked *