EUR/USD: Will Greek Reform List Satisfy The EU?

GROWTHACES.COM Forex Trading Strategies

Trading Positions

EUR/USD trading strategy: long at 1.1325, target 1.1550, stop-loss 1.1250

GBP/USD trading strategy: long at 1.5400, target 1.5580, stop-loss 1.5320

NZD/USD trading strategy: long at 0.7340, target 0.7660 stop-loss 0.7450

EUR/JPY trading strategy: long at 134.60, target 137.50, stop-loss 133.30

Pending Orders

USD/CAD trading strategy: sell at 1.2620, if filled – target 1.2370, stop-loss 1.2710, risk factor **

AUD/USD trading strategy: buy at 0.7720, if filled – target 0.7920, stop-loss 0.7610, risk factor ***

EUR/CHF trading strategy: buy at 1.0675, if filled - target 1.0990, stop-loss 1.0570, risk factor *

GBP/JPY trading strategy: buy at 182.50, if filled - target 186.20, stop-loss 181.50, risk factor ***

AUD/JPY trading strategy: buy at 92.60, if filled - target 94.30, stop-loss 91.90, risk factor ***

EUR/USD: Will Greek Reform List Satisfy The EU?

(long again taken at 1.1325)

• Eurozone finance ministers agreed in principle on Friday to extend Greece's financial rescue by four months, averting a potential cash crunch in March that could have forced the country out of the currency area. The agreement offers a breathing space for the Greek government to try to negotiate longer-term debt relief with its official creditors. 

• The agreement requires Greece to submit by today a letter to the Eurogroup listing all the policy measures it plans to take during the remainder of the bailout period. If the European Commission, the European Central Bank and the International Monetary Fund are satisfied, Euro zone member states will ratify the extension, where necessary through their parliaments.

• German Ifo's business climate index, based on a monthly survey of some 7,000 firms, increased to 106.8 in February from 106.7 in January. That was the highest reading since July, but below the consensus forecast for 107.7.

• The Ifo survey showed firms felt slightly more downbeat about the current situation than in January but a bit more optimistic about their prospects for the next six months. The Ifo says managers' outlook for the coming six months improved to 102.5 from 102.0 the month before, while their assessment of the current situation dropped slightly to 111.3 from 111.7 in January.

• Let us take a look at Ifo Business Cycle Clock:

• The EUR/USD rose above 1.1400 at the Asian open from the Friday’s close at 1.1380 in reaction to the tentative Greece/EU deal. However, the reaction was short-lived and the EUR/USD traded below 1.1300 again. 

• Our previous long position reached the stop-loss level at 1.1290 on Friday. We got long again at 1.1325 today, in line with our trading strategy . The EUR/USD may get another lift today If Greece satisfies the EUR with the list of promised reforms in order to secure the fourth-month extension. 

• We should know that the market never really priced in worst case scenarios involving Greek bank insolvency or a Greek sovereign default.

• Investors' attention will shift to Fed Chair Yellen testifying before Congress on Tuesday. Let us remind that we had dovish minutes and some quite hawkish speeches from Fed officials recently and the Congressional testimony would be a good opportunity to clarify to policy outlook. We do not expect any hawkish hints from Yellen given some weaker macroeconomic data from the U.S. economy.

• A week before stepping down from the U.S. central bank, Charles Plosser said the Fed can start sending the right message at a policy meeting next month, when he speculated it will likely drop a reference to patience in describing its approach to tightening monetary policy. The Fed repeated at its last meeting in January that it will be "patient" as it considers when to raise rates. But a steadily improving economy and a strong January jobs report have left many economists predicting it will drop that word soon. In our opinion the Fed’s the word “patient” is likely to stay in the Fed’s March statement. Let us remind that minutes of the Fed's January meeting revealed a surprising amount of concern over raising rates too quickly, prompting a drop in U.S. bond yields and boosting market bets on a later tightening.

Significant technical analysis' levels:

Resistance: 1.1430 (high Feb 20), 1.1450 (high Feb 17), 1.1486 (high Feb 6)

Support: 1.1278 (low Feb 20), 1.1270 (low Feb 9), 1.1262 (low Jan 29)