Under the spotlight again, Greece is now at the brink of an exit from the European Monetary Union (EMU). Breakdown in coalition talk further puts pressure on the euro. German Finance Minister Wolfgang Schaeuble is calling the vote a “referendum on whether the country stays in the euro” as noted in Bloomberg.com. If the re-election puts an anti-bailout party in charge ie. the Syriza party, we can expect more of a direction toward a Greek Exit (Grexit).
Greek bank run fears are surfacing as well. According to President Karolos Papoulias’s website, “Anxious Greeks have withdrawn as much as 700 million euros ($893 million) from the nation’s banks since the inconclusive May 6 election”. Just the prospect of a Grexit can cause a run on the banks because the exit would shut out funding except from the ELA as noted on ZeroHedge.
The hope of many EU bankers and political leaders is that Greece reforms and stays in the EMU. It will be painful, and unpopular, but necessary for the existential safety of the Eurozone. However, at the markets are losing hope, and this can be seen in the currency markets as the Euro slides across the board.
EUR/USD heads below 1.28. The next support is in the 1.2625-1.2670 area.
EUR/GBP continues lower, with 0.79, the 0.77 in sight.
EUR/JPY is falling through some support at 102.50, with the 100 handle in sight, as well as the 2012 low of 97.03.
EUR/AUD has topped off below 1.29, and heading below a rising trendline. A break below 1.2750 forms a top and breaks below this rising trendline, opening up at least 1.26, with 1.2135 low in sight as well.
EUR/NZD is holding at resistance at about 1.6575. A break below 1.6350 will confirm topping.
EUR/CAD broke below a key support at 1.2870, opening up the bearish outlook toward key support pivots at about 1.2770 and 1.2425.
EUR/CHF unmoved, resting about 1.20.
Fan Yang CMT is a forex trader, analyst, educator and main contributor for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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