Euro bulls see the light 10 7 2015

Euro bulls see the light

After many months of uncertainity and drawbacks Greeks deside to stay in the eurozone and submit reforms

The move started last night from Tokyo open and lasted untill New York open

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euro bulls

The EURJPY is a big gainer in trading today – rising by 2.29% today.

On Wednesday and Thursday, the lower global had the price looking to break the 100 day MA at the 133.50 level (haven flows). Today the price is back up testing the 200 day MA at the 137.036. Stocks and more confidence on Greece are helping the cause.
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When the price trades between the 100 and 200 bar MA and those MA are a distance apart, I call it trading between the Goal Posts.  Eventually, there is a break, but until then (with momentum), the price may be more inclined to ping pong between the extremes.

Zooming into the shorter term intraday picture by looking at the 5 minute chart, the price is now seeing a little more weakness in the last few minutes and is down testing the 100 bar MA at the 136.60 level (blue line in the chart below).   A move below that level will look toward the 136.413 (38.2% of the last trend move higher) and the 136.147 will be eyed (50% of the same move).  .

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The goal posts defined by the 100 and 200 day MA are wide. The market seems to be more happy trading between them for the time being  Eventually we will get that break.   In the meantime, take the technical clues from the shorter term chart. The 5-minute chart is still more bullish above the 100 bar MA.  A break below may change some of the bias, to the downside.  Watch the MA for that clue.

Insider trading

Here Is How To Trade Greece’s End-Game In FX – BNPP
09 Jul 2015 23:25 EDT

In its last week’s FX note to clients, BNP Paribas recommends selling EUR/JPY as the best FX play to trade the outcome of the Greek Referendum. Today, BNPP is out with its game-plan to trade this weekend’s eurozone leaders’ summit which BNPP sees as the end-game for Greece.

The stakes are high for this weekend:

“The stakes are high for this weekend’s eurozone leaders’ summit. The message to Greece is clear: a deal must be reached or it leaves the eurozone. This situation is likely to produce a binary outcome for markets, including FX. We assess the best ways to trade this outcome over the weekend,” BNPP notes.

We have now come to the end of the road:

“We have seen many ‘deadlines’ during the Greek crisis, but this time we seem to have come to the end of the road and the creditors have, for the first time, presented Sunday as a firm deadline. The decision to invite all 28 countries to deal with the Greek crisis at the EU summit on Sunday is also unprecedented,” BNPP argues.

1. A Deal. Sell EUR relief rallies against USD, GBP:

“This scenario produces a relief rally across most asset classes. European equities would rally and peripheral spreads would narrow. It is unlikely the EUR would appreciate broadly as it is difficult to argue that the single currency is trading at a discount to valuation. Outcome 1 would provide a catalyst for the re-establishment of EUR-funded carry trades,” BNPP advises.

“Accordingly, the EUR should depreciate, especially against higher yielders such as the USD and GBP. A clear exception would be EURCHF, which is likely to rally in this scenario. The CHF has served as a safe-haven – as indicated by the net long exposure of +24.,” BNPP projects.

2. No Deal. Sell EUR/JPY:

“This is the scenario the market fears…We view that EURJPY shorts would perform even better in this scenario, as an anticipated delay to Fed tightening would weaken the USD,” BNPP advises.