Eur/usd - page 293
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Euro blows through stops, up 35 pips in seconds
US dollar weakness takes holdShorting the euro was the easiest trade from Dec-March. It's been the hardest one since.
Today's euro decline has now been almost-completely erased with EUR/USD rising above 1.1050. The latest leg higher came in a flash after 1.1015 broke.
The Asian high of 1.1059 is resistance now.
The euro move led a swift decline in the US dollar right across the board. The commodity currencies have been similarly buoyant.
Tough market but it's been clear for 3-4 hours that dollar buying was exhausted for the day.
EUR/USD bounced right up from support level 1.0900 and now we are back again to test 1.1000. And tomorrow we have the famous FOMC meeting minutes.
FT: Greece given five-day deadline to avoid bankruptcy
The Financial Times with their take on the Tuesday Euro meeting.In brief:
More at the Financial Times (gated, but can be read with a free registration): Greece given five-day deadline to avoid bankruptcy
Greece Must Meet Sunday Deadline to Reform or Face Euro Exit
European leaders set a Sunday deadline for Greece to accept a rescue, saying otherwise they’ll take the unprecedented step of propelling the country out of the euro.
At a Brussels summit, Greece’s anti-austerity government was ordered to make new economic reform proposals that could earn it another aid package and head off financial ruin.
“We have only a few days left to find a solution,” German Chancellor Angela Merkel told reporters late Tuesday after euro-area leaders met in Brussels. She conceded that she is “not especially optimistic.”
Sunday now looms as the climax of a five-year battle to contain Greece’s debts, potentially splintering a currency that was meant to be unbreakable and throwing more than half a century of European economic and political integration into reverse.
“We have a Grexit scenario prepared in detail,” European Commission President Jean-Claude Juncker said, using the shorthand for expulsion from the now 19-nation currency area.
The euro dipped in response to the ultimatum, and was 0.2 percent lower at $1.0990 at 11.50 a.m. in Hong Kong, hovering near a six-week low. The MSCI Asia Pacific Index sank 2.4 percent to a five-month low amid a rout in Chinese equities that sent the Shanghai Composite Index down as much as 8.2 percent.
source
On yesterday session the EURUSD fell but found enough buying pressure shy below the 1.0955 level to turn back up but still closed in the red in the middle of the daily range. The currency is trading between two Fibonacci levels the 38.2 (resistance) at 1.1058 and the 50% (support) at 1.0955, these are the levels that we should pay attention for today.
ECB sees no shift of money out of the euro
ECB publishes report on the "International role of the euro"
Accompanied by comments from Benoit Coeure and Mario Draghi
Highlights of the report;
Here's the rest of it from the press release;
The euro was increasingly used as a funding currency by international borrowers in 2014 and early 2015, compared with the previous review period, while the share of the euro in foreign exchange reserves remained broadly stable. These are among the main findings of the report on "The international role of the euro", which examines developments in the use of the euro by non-euro area residents in 2014 and early 2015 and was published today by the European Central Bank (ECB).
One salient development was the fact that the euro's nominal effective exchange rate depreciated by 10% in the 12 months to May 2015, which affected various indicators of the euro's international use. At constant exchange rates, most indicators used to assess the euro's international use either recovered further from their dip in the wake of the euro area sovereign debt crisis or remained broadly stable over the review period. This was true of the euro's use as a reserve, financing and invoicing currency.
One of the most visible effects of the euro's depreciation over the review period was the decline in the nominal share of the euro in globally disclosed foreign exchange reserve holdings by 2.2 percentage points to 22.2% in 2014. Adjusting for exchange rate changes, however, the share of the euro remained broadly stable (declining by 0.2 percentage point), which suggests that valuation changes were the overarching determinant of the decline. "Despite the impact of globally diverging monetary policy cycles, foreign exchange managers on average were not actively shifting portfolios away from the euro area" said Benoît Cœuré, Member of the ECB's Executive Board.
In an environment characterised by low and declining interest rates in the euro area, the euro was increasingly used as a funding currency by international borrowers. The share of the euro in international debt issuance increased by 9 percentage points to almost 30% in the first quarter of 2015, compared with the same quarter of 2014.
The report contains two articles. The first analyses the impact of currency denomination in international transactions on the transmission of exchange rate movements to import prices. It analyses differences in country-specific degrees of long-run exchange rate pass-through (i.e. the transmission of changes in the exchange rate to import prices) in relation to the use of the euro as an invoicing currency in the respective countries. The article finds a causal - and economically large - link between invoicing currency choice and exchange rate pass-through: an increase in the share of the euro as an invoicing currency for extra-euro area imports of 10 percentage points lowers the degree of exchange rate pass-through to import prices by 7 percentage points.
The second article analyses how the roles of different national currencies as international reserves were affected by the shift from fixed to flexible exchange rates in the wake of the collapse of the Bretton Woods system.
You can knock yourself out with the full paper here
talking at EU parliament is hilarious
Shows that most did not go to the primary school
The single currency registered a decrease against the dollar on Tuesday. The euro depreciated by almost 45 pips to a closing price of 1.1009. Before that the pair reached a one-month bottom level of 1.0916, while the peak was recorded at 1.1058. The chart continues to develop under the moving averages and relative strength index remains in negative territory, which implies bearish sentiment and a test of 1.0955.
EUR/USD: Pair Attacks $1.11 as Traders Await Minutes
The pair was trading above the $1.10 handle during the US session as the greenback was seen weaker across the board, in anticipation of somewhat dovish FOMC minutes.
There has been no progress in negotiations between Greece and the euro group and the country has a final deadline on Sunday to propose economic reforms or face the consequences.
Traders will now focus on tonight's FOMC minutes, which might offer further insight into the monetary policy and will be closely watched as the FOMC statement released at June's meeting was rather dovish.
Moreover, June's dot plot suggested that most of the governors expect only one rate hike this year, which leaves the September meeting out of play, and the chart also revealed a slower pace than previously anticipated for the hiking process in 2016.
"While markets viewed the June FOMC statement as dovish, there is a non-negligible risk that the minutes hint at a more balanced discussion on rate hikes later this year – a discussion that could be perceived as slightly more “hawkish”. While the tone of the minutes is typically difficult to gauge, we believe that a more balanced discussion could help pull forward rate hike expectations after recent volatility has pushed the first fully-priced rate hike well into 2016," Gennadiy Goldberg, US Strategist wrote on Wednesday.
On Tuesday, the US Census Bureau showed a trade deficit of $41.9 billion in May, after a revised $40.7 billion gap booked previously.
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There is an impressive inverted hammer candlestick right on top of the 1.1000 support level visible on the EUR/USD weekly filter chart. I think the pair might start climbing again, next target being 1.1120.