A Victory of the People:
Alexis Tsipras’ left-wing Syriza party has cruised into government at elections held this weekend in Greece. After polling suggested a tight race in which Tsipras was no certainty of holding onto power, Syriza has come out unassailably leading with a 35.5% share of the vote compared with 28.2% for the centre-right New Democracy party.
This victory comes despite a turbulent first term in office that has seen Tsipras oversee the implementation of a harsh Eurozone-led austerity program. The election result, while not changing things fundamentally on markets, provides stability in government which is something that we know is immensely important for traders heading forward.
“This victory belongs to the people and those who dream of a better tomorrow and we’ll achieve it with hard work.”
With the Greek economy contracting 29% since 2009, the people just want progress. It is also interesting to note that all major parties that contested the election today were committed to continuing with the current EU bailout deal. We now look ahead to the end of the year when Greece face their first review of austerity measures imposed on them.
As we’re all feeling, the EUR/USD chart has bigger picture things to worry about than a narrative that’s played out with little effect for months to begin the year. The most recent drop in Euro can be more accredited to ECB Executive Board member Benoit Coeure warning that the Euro had experienced a significant appreciation and that this will put pressure on Eurozone growth forecasts reaching their expected targets moving forward.
Uncertainty Trumps Cheap Money:
With the Fed holding off a rate hike for at least another month, the continued access to cheap money was expected to give stocks a boost. However, with the Fed openly expressing their concerns around the pace of global grows and in particular China, things haven’t been quite as smooth as some expected.
After the Black Monday drop, ignoring everything but the technicals, we have got a healthy pull back into the 61.8% fib retracement. From here, price has rejected nicely with no close above the level and nice long wick highlighting the emergence of sellers once again.
That looks a fairly bearish reaction to me.
EUR Greek Parliamentary Election
JPY Bank Holiday
USD Existing Home Sales
USD FOMC Member Lockhart Speaks
CAD BOC Gov Poloz Speaks
Chart of the Day:
A pure Forex Technical setup today on NZD/USD, hitting channel resistance highlighted in our RBNZ Interest Rate Decision Preview blog post from two weeks ago.
As you can see, price rejected off channel resistance almost to the pip, giving the trend line a third confirmation touch. A chart of beauty for the technical analysis purists out there!
Do you see opportunity in trading NZD/USD?
Dane Williams – @VantageFX
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