ECB not decided on whether to contribute to Greek debt restructuring
This is according to EUROZONE sources.
Earlier today, there was chatter that the ECB would take a haircut on Greek debt. This comment suggests that they are not necessarily ready to do that.
Fed’s WIlliams says may have to purchase MBS if growth falters
- Buying MBS likely the best way to stimulate
- Inflation likely to run somewhat below 2%
- Unemployment rate likely to exceed 8% into 2013
- Likely to be well over 7% at the end of 2014
- Sees GDP 2.25% in 2012 adn 2.75% in 2013
With his expectation of growth at 2.25%, this is not enough to stimulate further declines in Unemployment. Hence if true, the Fed indeed would need to stimulate further. Bernanke and his supporters on the Fed, are looking at this uptick in the economy as a way to push momentum to where the economy’s growth is self sustaining. The threat is they do too much but I get the feeling that they want to err on the side of too much then too little. THis should be bearish for the dollar in the long run.
GBPUSD liquidates lower. Technical levels breached in the process
Fast break to the downside.
Stops were triggered below the 1.5840 level and the 100 hour MA did not even hold the decline. Longs are caught in the pair with EURGBP helping to keep the pressure on the GBP as it continues to move higher. Resistance in the GBPUSD is now at the 100 hour MA at the 1.58245 level. Look for traders to sell on corrective moves toward this level.
The 200 hour MA at the 1.5787 is the next target on the downside.
A Forex Quick look at the EURUSD
GBPUSD tests trend line/Fibonacci support
The GBPUSD is down testing key support against the 61.8% of the move up from yesterday and trendline support (on the hourly chart above). The market should find support against the level on the test. The catalyst for the decline is actually a rise in the EURGBP. The EURGBP has been moving higher today after moving above the 200 hour MA yesterday. Today, the price held support and moved higher off that level.
EURUSD tests channel support at 1.3249
The EURUSD is testnng support at the 1.3249 level. A move below this level opens the door for a test of the low from yesterday afternoon at the 1.3231. Other targets are the 38.2% of the move up at the 1.3212 level.
The range for the EURUSD is only 48 pips today. I would expect that the range will be extended at some point. The low for the day is 1.3240. The high is 1.32876.
ECB sources: Final decision on Greek debt likely next week
The ECB is reported to have come to an agreement in principle
USDJPY finds sellers at the 100 day MA
The USDJPY moved higher last night. Contributing to the rise was a report that the Current Account surplus came in lower than expectations. This helped weaken the Yen and move the USDJPY higher. However, the pair found willing sellers on the run up against the key 100 day MA.That level came in at the 77.15 level. The high came in at 77.179 (see blue line in the chart above).
Selling against the key technical level forced the pair back lower where it found support against the 38.2% of the move up from last weeks low. That level came in at 76.74. The low came in at 75.702. The price is now trading near the underside of the channel trendline (see chart below) at the 76.88 level. A move above this level should lead to more buying support for the pair. However, I would expect that the sellers against the key 100 day MA (at 77.15) will keep a lid on rallies for the time being at least.
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