Mixed trading conditions on Friday as market participants were mostly focused on the Greek issue and the Finance Ministers’ meeting with the negotiations between the Greeks and their creditors high in the agenda. Two days later and we’re still in a stalemate between the two parties even though we must note that there has been some progress during the weekend.
This week we expect the Greek issue to monopolize traders’ attention for two reasons: firstly, we’re drawing near the final deadline of the end of the month where Greece will technically default if it misses is $1 billion payment to the IMF and secondly, there’s not much in terms of other scheduled events or reports from elsewhere. So it will be important to monitor the progress of the talks as Euro and the rest of the European majors will be sensitive to any developments.
Taking a look at their technical outlook this morning, the Euro is trading around the 1.1400 area having been quite unstable during Friday’s session. The Euro dropped as low as 1.1300 when traders preferred to offload some of their exposure ahead of the weekend but later in the day the Single currency reclaimed higher ground.
Now its outlook is hard to be predicted as it is strongly correlated to the progress of the debt talks. The area between 1.1300 and 1.1400 must be considered no-man’s land and a strong exit from this formation based on some development, either positive or negative will show us what’s next.
Cable has been relatively unstable as well on Friday as it has formed quite a similar sideways pattern of its own. The UK currency has found it hard to overcome the 1.5900 barrier at this time and has been trading between this level and the 1.5800-30 support level for the past few days.
The outlook for the Pound is bullish but after a 10-day rally to the upside any fresh gains are harder to come without any new sparks. We expect limited volatility on the Cable today unless a surprise occurs and we see more price action. Other than that the same price range seems to hold and with the calendar being relatively empty today we should see more of the same.
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