Forex Trading Before Greek Election Number 2
And so the weekend is upon us...
Which way will the Greeks vote and, even if the Socialists do win, will the euro elite actually kick them out?
It's tempting to say that the markets are likely to go bananas on Monday no matter which way the electorate jumps.
However, in my 30 years of market watching it has been generally true that the more an event is feared, the less actual affect it has.
Readers will not be surprised to hear that I would generally lump myself into the Conservative camp. However, in the case of Greece, I find that my sympathies on many of the issues lie with Syriza and their leader Alexis Tsipras.
The main parties are just promising more of the same, with the vague hope that something will turn up and save the day. Unfortunately, the situation is so bad that a clean break is probably required.
Yes, it would be painful in the short-term but there are good reasons for believing that a complete default, and a return to the drachma, would be better in the long run.
The chaos of a default might also prove a salutary lesson to those countries that are operating with massive, uncontrolled deficits.
In the forex spread betting markets
, it is tempting to suggest that any client with a euro position should close it, or significantly reduce it, before 21:00 this evening.
There is an obvious risk of a major move over the weekend, as we saw last weekend, owing to the uncertainty over the Greek election
. Of course you might be right but it would be expensive to be wrong.
The euro is slowly pushing higher, currently trading at $1.2627/28, and is looking to break above the $1.2600/35 level and hold there.
We are seeing sellers come in at these levels, with tight stop/reversals above $1.2640. For the bears, the view is actually getting cloudier. There are quite a few support levels around 150 points below the current price.
The nervousness surrounding the euro will naturally continue through today's session and we may be at risk of sharp reversals.
The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced.
By Simon Denham, 15 June 2012