Daily Market Review - 1/21/2014

EUR/USD

The Euro has been under pressure for some time already. In the short term the outlook is the same. Support is around 1.3510. Resistance on the upside is approximately at 1.3570.

USD/JPY

Apparently after some correction the ascent has resumed. Resistance on the upside is at 104.90, and the rate is gradually approaching it. If the challenge is too tough, the rate might retrace to 104.50 and below.

GBP/USD

The Pound sticks to its prior pattern. It is still unable to get outside the boundaries on either side of the range. So our former outlook remains intact. It is recommended to wait for the outbreak.

Market Overview

On Monday there was holiday in the USA, so there was no point to expect any big moves on the market. At that there is a lot going on in Europe. From the beginning of the year Greece leads the EU. However Greece still remains the most problematic state of the monetary union. In accordance with an unofficial custom the “chairman” state puts national agenda aside and instead concentrates on contributing to common EU issues, which are in abundance at the moment.

Last week Greece prime minister presented a program to EU parliament with the main focus on contributing to economic growth, struggle with unemployment, launch of bank union, and resolution of immigration problems. But there is no way to avoid Greece woe itself, so he has received a lot of criticism about current situation in his own state.

So eventually it has come to discussion of financial aid to Greece. It had to get there sooner or later anyway. Meanwhile Greece has money, but there is a big hole of 11 billion Euro in the budget. It is still not clear, how it will be covered. Donor states (Germany first of all) are not ready to new aid. As a result everyone still hopes that economy will get back to growth, what will enable budget financing.

After Ireland return to the debt market, a lot have started to suggest, that Greece should service its debts herself. The premise for it is a dip of 10 year bonds profitability below 8% for the first time in 4 years. One of the main problems is a high governmental debt at the level of 176% of GDP.

Economic Calendar