MORNING BRIEFING:  Euro still caught in uncertainty, Yen slumps

What’s new:
FOREX: Euro finds some support
European Union: Greece’s bailout approvals from member states start coming in
European Union: Germany willing to support but upcoming elections make a clear cut approval difficult for greek bailout
Japan: Yen declines against most counterparts
Asia: Stocks end Higher

Overnight Rates and Indices:
EURUSD: 1.3397 – 1.3344.
USDCHF: 1.0756 – 1.0714.
GBPUSD: 1.5497 – 1.5374.
EURJPY: 126.29 – 125.51.
USDJPY: 94.35 – 93.93.
DowJones: 11’204.28  +0.63%
NASDAQ: 2’530.15 +0.44%
S&P 500: 1’217.28 +0.71%
Nikkei: 11’165.79 +2.3%.
Shanghai: 2’969.50 -0.47%,
Gold: $1’158.80
Crude Oil: $85.49

Friday Greece sought aid from the European Union and IMF,   this move and a statement of support from Germany (saying it was ready to commit to a plan to bailout the debt-strapped country) gave the EURO some relief as investors were reassured the troubled nation’s debt could be resolved soon.

Analysts however expressed skepticism, saying that the EUR 45bln was not likely to solve Greece’s longer term problems.  Euro lost some ground in today’s early session due to this skepticism but also because of Germany’s Finance Minister alluding that his country had not made a final decision on supporting the rescue effort.

Japanese Yen declined against most of the major counterparts, as stocks fared well in Asian sessions. Japanese shares led the way higher after the Nikkei newspaper reported that Toyota, would be posting an annual operating profit rather than the loss that had been expected.

With no data coming in because today’s economic calendar holds no releases, market will most likely be driven by risk sentiment and anything new about Greece’s bailout.

Support for the euro may be short lived and Euro will probably find downward pressure in the very near term. According to RTFX tradertip for EURUSD,  1.3449 stands as first resistance, a break of that level could lead the single currency towards the 1.3500 level - on the downside 1.3251 is the first support, while RTFX trend for the day seems quite neutral however.

Good Day.

Rudolf Muscat
Trading desk

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