Main market theme: European sovereign debt and Greek restructuring.

Risk-on session tonight on most markets. Main driver was Germany's announcement that it will step back in it's demand for a Greek restructuring, effectively allowing for a second bail-out. Of course next year we will have the same problem, but who cares. Also for the Greek people it means another year of hardships as the country will try in vain to reduce spending to meet certain deficit targets. But for now Greece is "saved" ... again.

Moody's put on review Japan's government ratings on review for a possible downgrade. However the only effect was a falling JPY, which was beneficial for the stock market. Also, Nikkei was supported by above expectations sentiment from the manufacturing companies.

In the commodities markets, Gold gained modestly and wheat fell due to Russia resuming its wheat exports, which it halted a year ago.



EUR/USD 1h

Break-out of the 1.433 level. Bias is strong to the upside, but a retest (or spike below) of 1.433 would be expected and used as a long entry point. Target should be 1.453





USD/JPY 1d

On a longer term, USD/JPY is still range bound. Expect more choppy trade and whipsaws. This movement may be suited for scalpers but not long term traders. My advice is stay away. Both USD and JPY are fundamentally weak currencies.





EUR/JPY 1d


EUR/JPY is on a long term bull trend. The level 114 was broker in February and it held now. Recommended trade is long with a target at or slightly above 120. EUR is a strong currency (remember rate increase?) and JPY is a weak one at currently, as there are QE pressures to rebuild from quake and the inability to raise rates. Also at this moment, as Greece will be bailed out, there is no more immediate risk in the markets.



Radu Ciofu,

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