Expect A Referendum for Greece and The Euro
In a surprise move, the Greek Prime Minister, Alexis Tsipras, called for a referendum on the bailout program Greece’s creditors proposed.
Tough times are predicted for Europe as this is a game changer. It can be very bad for the Euro as a common currency and spell trouble for the whole concept of a European union.
However, there are some thing to be considered before coming to a conclusion with respect to the breaking of the Euro area, and I will try to build a logical case for the Euro and Europe.
It all starts with Greece not being able to pay its creditors, (the European Union, European Central Bank – ECB and International Monetary Fund – IMF). Due to the conditions of harsh austerity in Greece, a new government was elected.
This was a far left government, and, like any democratic party, it represents the people of Greece. Prime Minister Alexis Tsipras seems to be depending on this and is pushing the decision back to the people of Greece to decide their fate.
This is all good and logical, but in doing this, in reality Mr. Tsipras is exonerating himself from any responsibility and refuses to go down in history as being the man that removed Greece from the European Union.
Regardless of all the above and what other more details may appear in due course, one thing was for sure: it was always going to be a wild opening this morning, with Euro taking the center stage once again!
Make sure there is plenty of margin in any trading account as the whole dashboard will be influenced.
This is a classical example that FX markets are not really closed for the weekend. I mean, they are, technically speaking, but in reality the events over the weekend almost always influence Monday’s opening levels.
From my point of view, any gap lower in the Euro related pairs is meant to be bought as I don’t think that Greece is going to go anywhere. If anything, a Greek exit out of the Eurozone should bring a stronger common currency as the rest of the countries that the Euro represents are in much better economic shape.
All in all, there will be turbulent times ahead, but this is to be expected when trading the currency markets. We should be able to define a difference between trading FX and other financial products, but is there a difference? In times like these and with news like these, most likely not, as virtually the entire financial market was shaken at the opening of the markets today.
Here we are, almost at the middle of the month and the market’s doing nothing except ranging. The reasons
The previous week ended with a bang for the US dollar as one of the most important economic releases
The overwhelmingly positive FOMC statement in December, indicating the probability of three rate hikes this year, triggered a rally