EUR/USD fell sharply after the German Finance Minister Wolfgang Schaeuble said eurozone finance ministers have failed to reach an agreement on the next tranche of loans to Greece.
He also said,
“Since the questions are so complicated we didn’t come to a final agreement, so we’ll meet again”.
Luxembourg Prime Minister Jean-Claude Juncker said he doesn’t know when the next Greek disbursement will happen but they made progress on package of steps to cut Greek debt.
EZ finance chiefs will continue talks on November 26. The headlines disappointed currency investors as the expectations were too high. The market participants anticipated that eurozone officials would release the aid package today.
Meanwhile, the sudden political instability in Japan has sent the yen to a seven month low against the greenback. The Japanese yen has been falling sharply after Prime Minister Yoshihko Noda called an election on December 16 and the main opposition leader Shinzo Abe, is pushing the Bank of Japan for more aggressive monetary stimulus. Shinzo Abe put monetary policy at the centre of debate ahead of the election, calling for unlimited easing, pushing rates below zero, directly underwriting bonds issued to fund public works, and setting an inflation target as high as 3%. Recent reports show that Japan will fall back into recession at the end of the current quarter.
The Asian stock markets opened lower today on expectations that a new government will aggressively push the Bank of Japan to expand monetary stimulus.. NIKKEI started the day at 9,213.73, previous close was 9,142.64. HANG SENG opened at 21,367.55, previous close was 21,228.28. Portfolio manager at Bayview Asset Management, Yasuo Sakuma said “The Japanese stock market is completely dependent on the Japanese yen, so it’s very simple. Maybe foreign investors will rush into the Japanese stock market. If you look at the trading volume last Friday and the last couple of days, not only short-covering but also the long-only, new money is entering the Japanese stock market”.
EUR/USD is trading at 1.2747 by the time of typing and for today resistances are located at 1.2771 and 1.2806. Support levels are 1.2713 and 1.2678.
GBP/USD is at 1.5897. Resistance levels are located at 1.5912 and 1.5949. Supports are located at 1.5875 and 1.5852.
USD/CHF is trading at 0.9446 by the time of typing and for today resistances are located at 0.9473 and 0.9505. Support levels are 0.9407 and 0.9366.
AUD/USD is trading at 1.0359. Resistances are located at 1.0398 and 1.0445. Support levels are 1.0324 and 1.0297