logo
  Join        Login             Stock Quote

Hopes For Greek Bailout Deal Help Boost Riskier Assets

 November 20, 2012 09:17 AM


Higher-yielding assets, including the euro and Australian dollar, saw modest gains to start off the week yesterday, as hopes that Greece will be able to secure a new round of bailout funds in the near future led to risk taking in the marketplace. Today, traders will want to pay close attention to a meeting of euro-zone finance ministers, scheduled to take place throughout the day. Any positive developments out of the meeting with regards to Greece receiving a new bailout package could result in additional gains for the euro.

Economic News

USD - Bernanke Speech Set To Impact Dollar Today

The US dollar turned bearish against several of its main currency rivals yesterday, as hopes that a deal can be reached to avert the upcoming US "fiscal cliff" led to some risk taking in the marketplace. In addition, signs that Greece is closer to receiving a new round of bailout funds helped boost higher-yielding assets. Against the Canadian dollar, the greenback fell more than 40 pips during European trading, eventually reaching as low as 0.9960. The AUD/USD advanced close to 50 pips to trade as high as 1.0410.

[Related -Health Net, Inc. (HNT): Potential to Be Huge Winners Says Bank of America]

Today, dollar traders will want to pay attention to several US news events. At 13:30 GMT, the Building Permits figure is forecasted to come in at 0.85M, slightly below last month's 0.87M. If the indicator comes in worse than expected, the dollar could extend yesterday's bearish trend. At 17:15, Fed Chairman Bernanke is scheduled to deliver a speech regarding the pace of the US economic recovery. Any indication that the US economy is slowing down could lead to further dollar losses.

EUR - Euro-Zone Meetings May Result in Euro Volatility

[Related -HomeAway, Inc. (AWAY) Q2 Earnings Preview: Top and Bottom Line Bullish Surprise?]

Speculations that Greece may be closer to receiving a new round of bailout funds led to risk taking among investors, which helped the euro advance against several of its main currency rivals yesterday. The EUR/USD advanced more than 30 pips to trade as high as 1.2786 toward the end of European trading. Against the British pound, the common-currency gained more than 25 pips during the mid-day session to trade as high as 0.8038.

Today, traders can anticipate significant euro volatility, as a meeting of euro-zone finance ministers is set to take place. The meeting is expected to largely revolve around whether Greece is eligible to receive a new round of bailout funds. The euro could see bullish movement against both the US dollar and yen if there is an announcement that Greece will receive the funds. Conversely, if the finance ministers fail to reach an agreement regarding Greece, risk aversion may cause the euro to reverse yesterday's gains.

Gold - Bearish Dollar Leads to Gains for Gold

Gold saw moderate gains during European trading yesterday, as a bearish US dollar resulted in the precious metal becoming cheaper for international buyers. The price of gold advanced close to $10 an ounce, eventually reaching as high as $1732, before dropping back to the $1728 level.

Today, gold traders will want to pay attention to the Eurogroup meetings, scheduled to take place throughout the day. The meetings may result in approval for Greece to receive a new round of bailout funds. If true, the dollar may take further losses against the euro, which could help gold extend its bullish trend.

Crude Oil - Supply Side Fears Drive Oil Prices Higher

The price of oil saw additional gains yesterday, as an escalation in Middle East violence generated supply side fears among investors. Crude advance close to $1.50 a barrel during European trading, eventually moving above $89, its highest price in nearly two weeks.

Today, oil traders will want to continue monitoring developments regarding the ongoing conflict in Israel. There have been rumors in recent days that a cease-fire between Israel and Hamas may soon come into effect. If true, the price of crude could reverse some of its recent gains. At the same time, any increase in violence may result in oil prices climbing further.

Technical News

EUR/USD

In a sign that upward movement could occur in the coming days, the MACD/OsMA on the weekly chart appears close to forming a bullish cross. That being said, most other long-term technical indicators place this pair in neutral territory. Traders may want to take a wait and see approach until a clearer picture presents itself.

GBP/USD

The Bollinger Bands on the daily chart are beginning to narrow, indicating that a price shift could occur in the near future. Additionally, the MACD/OsMA on the same chart has formed a bullish cross. Opening long positions may be the smart choice for this pair.

USD/JPY

The Slow Stochastic on the weekly chart appears close to forming a bearish cross, indicating that this pair could see downward movement in the coming days. This theory is supported by the Williams Percent Range on the same chart, which has crossed into overbought territory. Opening short positions may be a wise choice for this pair.

USD/CHF

Most long-term technical indicators indicate that this pair is range trading, meaning that a definitive trend is difficult to predict at this time. Traders may want to take a wait and see approach, as a clearer picture is likely to present itself in the coming days.

The Wild Card

EUR/SEK

The Williams Percent Range on the daily chart has crossed over into overbought territory, indicating that a downward correction could take place in the near future. Additionally, the Slow Stochastic on the same chart has formed a bearish cross. This may be a good time for forex traders to open short positions ahead of possible downward movement.

Article Source: Hopes for Greek Bailout Deal Help Boost Riskier Assets

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageChipotle Mexican Grill, Inc. (CMG) Q2 Earnings Preview: Will Higher Traffic Offset Higher Costs the Key

Chipotle Mexican Grill, Inc. (NYSE:CMG) will host a conference call to discuss second quarter 2014 read on...

article imageNetflix, Inc. (NFLX) Q2 Earnings Preview: The Ruby Month for a Reason

Netflix, Inc. (NASDAQ:NFLX) will post its second-quarter 2014 financial results and business outlook on its read on...

article imageLadenburg Thalmann Financial Services (NYSEMKT:LTS): Heavy, Durable Insider Buying

Ahh, but any worries over price levels didn’t stop multiple insiders at Ladenburg Thalmann Financial read on...

article imageInternational Business Machines Corp. (IBM) Q2 Earnings Preview: Small Beat and Pop

International Business Machines Corp. (NYSE:IBM) will host a conference call Wednesday, Jul. 16, 2014 at read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

The SEC Does Some Things to Money Market Funds
More Articles on: Forex



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.