Varoufakis on the Out

Varoufakis Who?:
It’s all looking like coming to a head again in Europe, with Greek Finance Minister Varoufakis taken off EU/IMF negotiations. This is in favour of a new way of going about negotiations with hopes a direct relationship between PM Tsipras and German Chancellor Merkel will get the job done.

Greek Finance Minister Varoufakis has been increasingly isolated by the EU and Greek government as an inability to (right or wrong, it doesn’t matter to them at this stage) get a deal done in a timely manner.

Whether it’s right or wrong in terms of what happens to the Greek people, EUR/USD continued to like the idea that things are actually progressing forward for Greece with the pair smashing up 100 pips from it’s lows where price was then capped by the trend line resistance I speak about in the Chart of the Day section.

Greek 10 year yields were also hammered down a full percentage point on the back of the Varoufakis move.

Optimism can do crazy things!

On the Calendar Today:
RBA Governor Stevens this morning delivered a speech at the Australian Financial Review Banking & Wealth Summit in Sydney. Stevens was expected to stay away from Monetary Policy discussion today but the Aussie is being bid on the back of some discussion during questions about what a low interest rate environment really means… Something the RBA hasn’t quite come to grips with just yet either.

Wait and see on this one.

Japanese retail sales also on the calendar during Asia. A 2nd tier release but one for the JPY traders to be aware of.

Tuesday:
AUD RBA Gov Stevens Speaks
JPY Retail Sales

GBP Prelim GDP
CAD BOC Gov Poloz Speaks
USD CB Consumer Confidence

Chart of the Day:
EUR/USD Daily:

This chart is just simply running the upper channel line parallel to the bottom line from the 2 marked points. I thought it was interesting that the stall in momentum on the EUR/USD rally has come at this point.

If the play is the expectation of continued fundamental Euro weakness and USD strength to kick back in, there is definitely a great risk:reward short in this zone we are in now.