Forex Spider's Den GF Edition

Mr.Haruhiko Kuroda boosted the YEN with his comment about Yen weakness. He implied that a lower Yen was a boost to Japan's economy and that is hard to see Yen's effective rate falling further. The comment itself plummeted the YEN sending USDJPY down below 123.00, an instant 1.4 % loss.

Technically USDJPY could continue falling towards 122.00 but if we get a retracement to the upside, we could use it for short trades. 123.75 ( L4,61.8, previous triple bottom swing ) shows confluence and now moment sellers should reject the price towards 122.00. Have in mind that the pair is moving and that we might see a new low even without a retracement. But just in case, 123.75 is the zone to short into.

 

NZDUSD has reached the target as I analyzed Today we can see a regular bullish divergence in play, but judging from bot TECHNICAL and FUNDAMENTAL alignment in the pair we could try to FADE a potential bullish retracement. First POC ( H3, 23.6 ) around 0.7010 zone could reject the price initially but in the case of deeper retracement i am paying attention to 0.7060-7080 zone ( H5, 50.0, previous swing high/low) and rejections should target 0.6900-0.6875.

 

AUDUSD is showing a sideways action pattern but in the near term history we have seen 0.7690-0.7700 longs. If this action still persists with this pair next wave of buying could be seen again within the 0.7690 - 0.7700 zone. If 0.7736 breaks (L3, inner trendline ) AUDUSD would bounce again above the inner trend line thus making a possibility for further gains towards 0.7770 and 0.7800.

Any momentum break of 0.7675 level to the downside could expose 0.7635.

 

NZDUSD has a positive correlation to EURUSD and its rallying towards near term historical sellers. Given recent RBNZ governor's comments and technical decline we can still assume that NZDUSD is bearish. Currently NZDUSD is following EURUSD strength and USDx weakness and current retracement ( loss of momentum ) could be countered around 0.6990-80. POC shows 4x time toptrend line, 78.6, Historical L3 and all that below a trend line which is holding the round number resistance ( 0.7000 ). The target could be 0.6910 which corresponds to L4 support and Higher Low trend line confluence.

 

AUDUSD has been making bearish zig zag after it was rejected from 0.7850. If we get a retracement above the trendline we could possibly have 2 spots for new shorts. First POC ( 50.0, DPP, previous breakout ) comes in 0.7780-90 zone while next surge of sellers could show at POC2 ( 61.8, near term historical sellers, pin bar rejection ) around 0.7810. 0.7850 double top needs to hold for this setup to be valid, and the targets for the move are 0.7740, 0.7725 and ONLY 4h close or momentum breakout below 0.7720 will target 0.7650.

 

NZDUSD is perfectly following the trend, meeting all the targets we have previously discussed. Fundamentally Flash PMI rose by 0.2 % from the forecast ( 49.6 from 49.4 forecast) The expectations see RBNZ to further cut the rates which are putting additional weight to the pair.
Technically the pair is too low to position trade safely now, so I would rather wait for a retracement. We can see that the pair is making a valid bearish ZIGZAG pattern which is a sign of a stron bearish trend. POC comes at 0.6960-6970 ( Retail Gap trendline, H4, 50.0 ) but we can also mark 0.6930 as a possible retest zone ( H3, DPP, 38.2). 0.7000 levels should hold and 0.6750 is the target.

 

After some good movements of EURUSD during previous months , June has mostly been very choppy for EURUSD pair. Greece vs EU is all over this pair and that has been reflected also on charts where positional trading has been futile.

Still taking some fundamental facts and possible solution, aligning it with technical analysis, we could spot a bearish consolidation around 1.1200 zone. Having dropped from 1.1400 levels to 1.1200 levels points to conclusion that a relief rally fade could be the option. 1.1235 (38.2, H4, previous swing h/l) and 1.1270 (H5, 50.0) could be the spots for a short trade but stops should be kept around 1.1310 just in case. targets should be 1.1165-50 where the break of the level leads to 1.1120 followed by 1.1090.

For any trades taken on this pair, recommended risk should be 0.5 % as the EUR has been mostly governed by carry trades and bond markets throughout the summer which has been adding to technical and fundamental misalignment

 

AUDUSD has broken through the weekly trend line support and currently it is retracing towards possible rejection zone. POC comes at 0.7680-90 ( H3, 61.8, trend line, near term sellers ) but we also need to pay attention to any close below the level. The pair has closed "retail gap" after the weekend volatility caused by Greece/EUzone negotiations and it has reached 0.7585 where it has made a spinning top/master candle rejecting the support for further retracement to the upside. POC zone could reject the price towards next support - 0.7620 while the momentum break ( with stop grab ) or H4 close below 0.7585 should target 0.7540.

 

Monday retail sales in Japan expanded by 1.7 % vs forecast of 1 % increase. Yen also strengthened due to Greece uncertainty and safe heaven flows.
Technically the pair reached weekly L5 which marks strong support and pullback towards POC could give us an opportunity to short it again. POC comes at 123.20-30 zone ( L3, 61.8, previous swing ) and it should provide shorting opportunities towards 121.50, next level if L5 breaks. For the pair to remain bearish 124.05 should hold as we have 2 trend line cross , and previous swing high as a resistance.

 

EURUSD has dropped after Greek "No" vote on referendum which was held on Sunday. After a bailout proposal has been rejected EURUSD gapped down on early market open by 200 pips dragging EUR basket with itself. Technically selling into rallies towards 1.1100 ( DPP, 38.2, descending 3-touch trend line ) is the option as stops are presumably located just above 1.1130. Targets should be 1.0920 ,1.0880 and 1.0820. Have in mind that trading EUR pairs should be done with lower risk as any news about Greece and EU could get the price into a whipsaw mode.

 

Japanese Yen surged after safe heaven flows confirmed a move to USD and YEN. BOJ governor Kuroda also implied that the economy is recovering at the moderate pace, so the interest in safe heaven JPY has sparkled again.

CHFJPY is in downtrend following the bearish equidistant channel. Pullbacks towards 130.55-80 could be used for short entries as we could see a confluence point (POC) which consists of DPP, 50.0 and the top of equidistant channel line. Additionally this is a bearish zig zag inside the equidistant channel.

H4 ( 4 hour ) close below L4 support -128.80 would target 128.00 and the break below 128.00 will target -127.50 which corresponds to rounded number support and L5.

 

GBPUSD has broken through the rectangle range and it is making a bearish zig zag pattern. We can spot a 3 - touch trend line making a confluence - POC at 1.5410-30 with 61.8 and H4 camarilla. Adding to that we can spot a bearish pin bar rejection at the zone and if the pairs sustains current momentum it should target 1.5325 then 1.5270.. On a strong momentum push or 4H close below 1.5270, 1.5220 is next. For this scenario to be valid a previous rectangle low should stay untouched ( 1.5530 )

 

AUDUSD has been consolidating below 0.7500 and traders definitely don't want to fight back with RBA governor's Stevens comments that the AUD currency is still overbought.0.7470 is showing a good POC ( now moment sellers, 61.8, descending trend line) If 0.7500-10 holds we could see a drop to 0.7400 followed by 0.7350 and 0.7280. However we need to see a break of lower TL (green dotted TL) and L3 -0.7400 to the downside for further bearish momentum.

 

USDJPY has been showing strength and resilience in last 4 days. Technical pattern which is currently shown on H4 chart is clearly V shaped reversal/ Diving Board and it marks strong bounce off important 120.00 zone. Currently the pair is struggling to break 123.35 and above the level pair is considered bullish. If 123.50 breaks the pair could head towards 124.45 , previous double top which shows a confluence with 124.35 resistance. If the pair breaks 122.90 it could gain additional momentum towards 122.00 and 121.50. Overall sentiment and technical picture is still bullish so we need to pay attention to the levels. Breakout/Continuation to the upside is favoured due to momentum and V shaped reversal.

 

Greece situation, BOC's interest rate cut and general safe heaven demand reflected on USDCAD pair which is breaking through important resistance levels. Adding to USDCAD rally Canada's banks also lowered their prime lending rates. Most banks lowered their prime rates by 0.3 % this year.
Technically USDCAD has broken a previous triple top 1.2805 and it is consolidating around 1.2830 at the time of the writing. Any pullback towards 1.2870-50 region could be treated as buy into dips as POC zone marks important confluence spot (DPP, L3, 50.0). The pair needs to break and close above 1.2980 to proceed towards H4 -1.3050 and further towards 1.3150. 4H close above 1.2980 is preferred. However if the momentum remains strong within the bullish context we might see a direct rise towards 1.2980 zone.
If the pair dips below 1.2805 it will be contained within NEUTRAL-to-BULLISH consolidation and will negate the possible move to he upside at this point.

 

Hi guys, I have just published an article on AM website - Original source is here: http://goo.gl/xG6el0

And here is copy/paste

It seems as though everyone has been talking about Greece over the last couple of months and no wonder with the Greek government debt to GDP ratio at a huge 177.1 % of GDP. Government debt has averaged approximately 91.95 % over the period between 1980 and 2014.

In 2014 it reached the record high. Whilst 1980 saw a record low in this figure for Greece, according to Eurostat, with a ratio of only 22.60 %.



We have probably all read plenty official economic reports and articles about the current situation It seems as though everyone has been talking about Greece over the last couple of months and no wonder with the Greek government debt to GDP ratio at a huge 177.1 % of GDP. Government debt has averaged approximately 91.95 % over the period between 1980 and 2014.

In 2014 it reached the record high. Whilst 1980 saw a record low in this figure for Greece, according to Eurostat, with a ratio of only 22.60 %.

in Greece any of which have been filled with statistics and facts

But in this article we will take a look at some lesser known facts, many of which have been publicized by James Angelos a Berlin based– former Wall Street Journal journalist. James is the author of "The Full Catastrophe: Travels among the New Greek Ruins" I will also add my own opinions which were formed as I travelled throughout the Greek mainland.

The book by James Angelos reveals just how much corruption has infiltrated all the pores of the Greek society- From a small island whose residents pretended to be blind in order to get a variety of benefits, to the "poor" businessmen and doctors who reported modest earnings and yet lived in the most elite districts of Athens.

The book presents us with details of the enormous tax and other frauds which devastated the Treasury. Of course, it was not Greeks who invented all of these scams but they are special in one respect.

According to the book, what separates Greece from other EU members is the amazing and rapid spread of corruption and crime in Greece even in the lowest levels of society.

THE FAKE DISABLED

One example of this rapid and pervasive spread of corruption came from the deputy Health Minister- Markos Bolaris who stated that when his ministry called for an official review of the large number of disabled applicants ( in order to determine whether they were indeed disabled)

The disabled were asked to present themselves at Government offices for assessment. Remarkably some 36.000 of these individuals did not respond to the government call.

When this particular fraud was revealed the government took swift action against those who hadn't responded to the government call. With this move the state saved itself about Euro 100 million per year, which is how much the Fake Disabled were costing the state. However this was not the most outrageous incidence of fraudulent claims.

THE ISLAND OF THE BLIND

What Angelos discovered was the tip of the iceberg. How big is the problem with similar frauds? It is not big. It is HUGE.

"The island of the blind"- not an ancient Greek myth but rather the exclusive holiday destination of Zakynthos. In the year 2011 James Angelos took a vacation here. Whilst there, he discovered the most incredible information. Out of 680 residents of the island -498 of them were registered as blind.

James probably doubted his own vision as what he saw was just incredible. The residents of Zakynthos drove their cars and almost NONE of them were not wearing spectacles, yet they were supposed to be blind?? Right?

It turned out that to be that blind in Greece entitled one to numerous benefits for example the blind received an extra €724 per month in benefits and aid, as well as many other discounts on various goods and services.

It was a scam. The government discovered the scam by sending only one ophthalmologist onto the island. "The blind of Zakynthos" cost the state almost Euro 9,000,000

PENSION FRAUD

Then there was the little problem with state pensions. The government noted a suspicious figure of 8.500 retired persons (pensioners) who were more than 100 years old. When they made a thorough search of the pension system the Government found it had almost 40,000 fake pensioners on its books. It was came to light that large numbers of people simply "forgot" to report that their family members died and continued to collect their pensions according to Angelos.

GREEK NATIONAL TOURISM ORGANIZATION FRAUD

Almost Euro 150.000 could have been stolen in an attempted fraud at EOT- the Greek National Tourism Organization.

Reportedly a woman tried to cash a cheque which bore the forged signature of the ex-general secretary of EOT. Based on bogus invoice, the cheque for Euro 147,600 was intended to be a payment for the purchase of a hotel on the island of Syros and this surely wasn't the first time for similar frauds.

A POOR COUNTRY WITH A LOT OF RICH PEOPLE – TAX FRAUD

According to the data from 2011, within the Greek tax system, there are ONLY five thousand people (5.000) who earn more than ninety thousand euros (90.000) per year.

Causing The Economist magazine to describe Greece as "a poor country with a lot of rich people"

The streets are full of luxury villas with swimming pools, while the doctors and businessmen often declare earnings between just Euro 8,500 to Euro 12.500 per year (!)

Out of all of the owners of the many thousands of luxury villas in Greece just 300 of them reported that they had swimming pools and duly paid their taxes, but thanks to Google Earth, the government got slightly higher figures.

Google revealed that there were more than 20.000 villas with swimming pools which is a huge disparity between the reported (300) and actual numbers (20.000). The fraudsters responded by buying camouflage-print tarpaulins to cover up their illicit swimming pools.

It has been estimated that Greece annually loses about Euro 20 billion through various forms of fraud and tax evasion, When Angelos expressed the opinion to a state officer " that the state should be punishing thieves and scammers"- he got the answer: "It would mean that half of Greece ended up in jail "

Adding to existing problems in Greece, there is also a problem with "Golden Dawn" – a neo-Nazi party whose rise to prominence was the consequence of Greece implosion. Their anti-immigrant hysteria which instilled terror in Athens and other cities won them 18 seats in Parliament in the 2012 elections.


CONCLUSION:

This article is not meant to humiliate honest people of Greece. There are many people who know what has been going on but have been powerless to do anything. Those honest and proud people suffer because of government inability (or unwillingness) to do anything radical.

Today as we could see The Greek parliament passed austerity measures in order to begin talks for a new bailout package. The package will keep Greece in EUR but the thing is that Prime Minister Tsipras might call for new elections.

Tsipras required the support of pro-european parties in order to secure the majority in the parliament.

The effect of this Tsipras move may lead to a further split among the Syriza party but there was no alternative and he knows it too.

I am about to state my opinion about possible impact if Greece exited Eurozone.

If Greece wants more sovereignty, it could leave the EUR and return to DRACHMA. I don't think that Greeks really want that as an exit could bring them more misery than good.

Since 1970 Greece really pushed hard for European Community membership. Greece grew faster than all other Eurozone nations thanks to relatively cheap borrowing which euro membership provided.

What will bring more benefit to Greece? If they choose to stay in EU, it will still remain dependent on its richer neighbors especially Germany which is the leading force in EU economy.

We must not forget UK as UK definitely wields far more influence in EU then some people might think. The threat of Grexit to UK is minor. Trade with Greece is less than 1 % of total UK exports and there are minor banking exposure.

The problem could be a domino effect as recession and credit crunch could not be avoided by UK and possibly Germany.

As I said -the direct effect of Grexit will be the adoption of new/old Greek national currency – the Drachma.

The Drachma would depreciate instantly overnight but at the expense of both German and UK exports and for all those creditors who lent EUR to Greek private and public sectors.

On the contrary though an undervalued Drachma could be good for Greek exporters as cheaper currency benefits both exporters and their customer's foreign importers.

However the drawback of having a cheaper national currency is higher inflation, higher funding costs for governments and hardly any company acquisition opportunities.

If Greece had stopped paying those benefits to fraudsters and criminals alike years and years ago, things would have surely been different today. It is very sad that the country with such a vast history has allowed this to happen to itself and that all honest people in Greece suffer because of government corruption, inability or unwillingness to deal with cancer from inside.


Nenad Kerkez ,MSc in Economics

Head Lecturer and Market Analyst, Admiral Markets

 

NZDUSD is retracing prior to RBNZ Official cash rate which is due on Wednesday 21:00 GMT. Also, mr.John Key, who is the Prime Minister of New Zealand commented that the currency has fallen too fast. However this retracement in my opinion is temporary and as always the governor of RBNZ mr.Graeme Wheeler has the final word and he is responsible for setting up NZ interest rates.

Technically the pair is still in downtrend and 0.6620 zone shows a good confluence for a fresh short. In the zone we can see a confluence of H3, 50.0, previous sellers vs now moment sellers and descending flat bottom triangle breakout point. NZDUSD should stay below the top trend line of the triangle confluence (0.6690-0.6700) for the bearish bias to remain and target is 0.6455, L3 weekly camarilla support.

 

As we could witness last week Greece agreed with austerity package and received well needed money which will keep it safe for now.Greece banks also reopened on Monday and currently we can see a weak relief rally in the pair.

Technically EURUSD is still in downtrend ( LH/LL , MACD < 0, inner trend line broken, new lows being printed ) and we need a nice rally to sell it higher. 1.0940-60 if reached could provide us with new shorting opportunities. POC comes at 1.0940-60 ( H3, DPP, 38.2, previous swing) and rejection should target 1.0770-50. Strong resistance lies around 1.1040 region as we can spot 2 trend line cross in confluence with H4 cam pivot.

 

USDJPY surged up on equities jump to record highs. Adding to that there is a possibility of a rate hike in September which fueled the pair. "Turnaround" Tuesday tanked the pair and currently we see a retracement in uptrend.

Technically we might see a drop to 123.40-50 zone where we see a POC where the pair could reject. POC ( historical buyers, L4, 61.8) shows historical buying from the 123.40 zone and the pair could face with "historical vs now moment buyers" principle if the zone is reached. Target for the bounce is 124.30 and the scenario is valid only if 122.90 holds.

 

As we could read in my previous USDJPY research ,the pair followed the analysis and currently it is undergoing a bullish consolidation around 124.00 level. Very strong Unemployment claims numbers have boosted USD as the number represents an important signal for consumer spending which is correlated with labor market conditions.
Technically USDJPY found support at 123.80 ( July trend line, 50.0 fib, DPP ) and it needs 4h close or H1 sustained momentum to reach 124.15 and possibly 124.60 during the day. Current ATR is only 50 so we might need ATR overshot to reach daily resistance at 124.60. Low ATR is due to consolidation in between resistance trend line (black) and ascending-supporting trend line (red).
If the pair breaks 123.80 to the downside it will be faced with a cluster of supports with a strong intraday support at 123.40.