FXStreet (Guatemala) – EUR/USD is broadly offered post the Greek referendum and NO vote, currently trading at 1.1021 with a high of 1.1042 and a low of 1.0969.
EUR/USD has fallen through the net on a bearish gap post the Greek referendum results on the open of electronic trades for the week, with gold up $4.00 on the open as a safe haven given the implications of this result, which in turn gives us a clue what this may mean for the single currency for this week as investors look for safe havens.
EUR/USD price action
However, EUR/USD has in fact taken a bid on the open of electronic markets as we make our way through early Asia. Demand took the single currency back on to the 1.10 handle reaching a high of 1.1036 bid in the first couple of minute of trade. The gap was formed from 1.1114 on Friday’s close to 1.0969 in the opening hour. The bounce may not be a surprise as we have seen this type of price action on a number of occasions over the Greek debacle and EUR/USD has, at times, been sidelined by traders while being unpredictable. One trade to watch out for comes as the SNB may wish to prevent EUR/CHF falling to previous 2015 lows at 0.9665 on risk off play.
EUR/USD fundamentals
EUR/USD is offered broadly as risks mount toward an Grexit. The results of the Greek referendum are a very big “No” while the projected turnout in Sunday’s referendum was about 60% and the data presented by the interior ministry showed that 61% of those whose ballots had been counted were voting “No”. This, vs just 39% voting “Yes”, leaves Athens with a stronger case to come back to the negotiating table saying that they put the Eurozone’s demands to a democratic test and that they were rejected by the people.
Process before a possible Grexit?
From here, Greece’s Tsipras has stated that Greece will now commence negotiations with their creditors tomorrow in order to try to restore the banking system for Tuesday. This appears to be acceptable as EU leaders, Merkel and Hollande, are now calling for a summit on July 7th in Europe Tusk, President of the European Council, has confirmed this in the last hour. Greek Finance Minister Yanis Varoufakis when responding to the Greek referendum has called it, “a big yes to a democratic Europe”.
EUR/USD technically
EUR/USD’s technical levels need to be monitored from a distance, given the huge amount of volatility that is already emerging as we progress through early Asia ahead of the Tokyo open and then full markets in Europe, and the US who were out for 4th July trading and now recharged, ready for action post the Greek referendum, no doubt coming out with full body armour and tin hats!
Meanwhile, the base of the cloud has been penetrated at 1.0994 on today’s lows, which is a bearish signal however in these early hours, there is reluctance to sustain a break down further.
Further out, the initial resistance is at 1.1280/1.1325 and through there we enter in to a congestion zone at 1.1440/1.1534, the recent highs. 1.0820 guards 1.0520 ahead of 1.0469 2015 lows last traded since 2003 and then parity. Separately, analysts at JP Morgan have said, ‘Grexit’ worth 5 to 10 cents of maximum downside.’
(Market News Provided by FXstreet)