The fate of the Euro seems to have been decided as Greece is back at the negotiation table after a referendum that split the Greek nation into two parts.
The question being asked last Sunday was if Greece should accept the proposal its creditors (The European Union, Governments, European Central Bank, and International Monetary Fund) made, or should they fight for better terms.
The argument of Mr. Tsipras, the defiant Greek Prime Minister was that the money in the first two bailout programs for Greece did not really go to the Greek people but its whole purpose was to bail out European banks.
Regardless of the reasons, one thing is for sure: Europe is at a boiling point, and the very premise of democracy, fraternity, and solidarity; principles that Europe is being built upon, are in danger these days.
No one wants Greece out of Eurozone and European Union it seems, at least for a simple reason: it is not that easy to kick a country out of the Eurozone or European Union as there is no path for doing that. Also, allowing the Greeks to leave it will create a dangerous precedent.
My take after the dramatic weekend behind us is that Greece needs to come up with some serious reform proposals, otherwise the 21st of July deadline (a huge payment is being due that day), may become the reckoning day for Greece.
As for the FX markets, the previous Monday was the second time in a row a gap was present at the opening, and the whole week has seen markets desperately try to fill them. On some pairs, they are closed, on others still open, but this all implies the same thing: whenever gaps are present, most of the time they are due to something negative rather than something positive.
The USDJPY started with the 3rd wave to the downside, in what seems to be a move towards the 120 level, a move that I was anticipating here since the pair was dealing at the 125 level, while USDCAD lives in its own world.
USDCAD is well above 1.27 area as oil is feeling the US dollar heat, and commodities are being crunched by a mix of US dollar strength and Chinese equities breaking lower.
All in all, we have an interesting summer for 2015 and judging by the events ahead of us, I would say there is no doubt in my world that we will see the same volatility moving forward.
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