Greek support for debt swap plan gaining

Good news in Greece – Bad news in Japan

In an apparent knee-jerk reaction to data which showed Japan’s current account swung to a record deficit in January, the Yen dropped against the Dollar earlier today. Risk currencies gained though, on hopes that Greece may finally secure a bond swap deal.


Tokyo posted its first current account deficit in three years, which resulted in investors selling the Yen. The deficit data shows a 437.3 billion Yen ($5.41 billion) deficit in January, much larger than the 317.8 billion Yen deficit markets had predicted.

Economists have reasoned that this is the result of a shift away from reliance by Japan on nuclear power, which in turn has now pushed up fossil fuel imports. Their consensus though, is that this will be a “one-off” figure and they expect the annual current account to remain in surplus for the next few years.

The Dollar had climbed 0.3 percent against the Yen to 81.32 which analysts say, is a headline-driven speculative movement and factored in that no one really wants to make aggressive bets ahead of Friday’s U.S. jobs data, and ahead of the impending Greek deal outcome.

Greece’s debt restructuring efforts seem to have made some progress after a group of major banks and funds confirmed that they would take part in the swap.

As a result, earlier today the Euro recovered from a three-week low, which saw it touch below $1.31 on Thursday.

With the all-important U.S. non-farm payroll jobs figures due on Friday, news that data at hand was showing that the pace of job creation by U.S. private employers had picked up in February supported risk sentiment, in turn bolstering the single currency.

The ADP National Employment Report showed that the U.S. private sector added 216,000 jobs last month, higher than economists’ expectations for a gain of 208,000.

On Friday, many analysts expect that data will show a gain of 210,000 in nonfarm payrolls.

Riskier assets benefited from a Wall Street Journal report, which suggesting that Fed officials were considering buying longer-dated bonds and draining funds in the banking system.

The Aussie gained 0.3 percent to $1.0615 and erased initial losses following surprisingly soft Australian jobs data.

At the moment, many investors are holding back for the outcome of Greece’s bond swap deal proposed to private creditors and the European Central Bank policy meeting, which will be held later today.

Private investors have until 2000 GMT on Thursday to agree to the debt swap on the 206 billion Euros of Greek bonds they hold.

Should the deadline be extended again, we could see the Euro take a beating.

All the best!
Adrian Jones



Yen Dips, Uncertainty Remains Over Greek Debt Swap

The Japanese Yen dipped against the US Dollar and the Euro after Japan posted its first current account deficit in three years.

The Euro edged upwards but most analysts believe it will struggle to hold on to these gains ahead of the Greek debt swap.

It would be best not to take any long term positions close to the outcome of Greek debt deal and Friday’s U.S. jobs data.

News Watch For EURJPY

There are two High Impact news releases scheduled for the Euro today:

12:45pm GMT EUR Minimum Bid Rate
01:30pm GMT EUR ECB Press Conference

EURJPY Analysis

The EURJPY pair has just reached a support zone after reversing to the long side in early trading. Take a look at the following chart:

As you can see, price found support at the 105.700 level and bounced up towards the short term, upper bearish channel trendline.

As I write, price has broken out of the bearish channel and has rallied to the 107.650 level but we could be in for a wild ride with 2 High Impact News releases coming up in a few hours.

So, at the moment, I do not have any entry signals and I am not considering opening any new positions until the dust settles later today after the ECB Press Conference.

All the best!

Senior Trader for
World Class Trading Stars


Yesterday saw the Cable stop at the 1.5700 area for the second day and then overnight turn upwards. At the moment we’re kissing the backside of a trend line from the daily chart and stalling. My indicators are starting to provide a clue with some hidden bullish divergence starting to form.

However on the 4 hour chart we’ve got bearish hidden divergence starting to form. I still think we have a shot at reaching 1.5660 but as we approach the weekend anything can happen really because of the conflicting divergences on the daily and 4 hour charts. So we need to wait for a clear cut signal before we take an entry.

For the news today we have Unemployment Claims for the Usd at 8:30am which is high impact so be careful during this time.

Good luck and safe trading.

Senior Trader For
Forex Master Method


Thursday 8th Mar 12


4 hour chart

Weekly Pivot – 1.0745
Monthly Pivot – 1.0719

Resistance – 1.0719
Resistance – 1.0649
Support – 1.0508

AUD seems to be struggling at previous resistance of 1.0649, which is close to the 38.2% Fib retracement of 1.0640. As we are below the weekly and the monthly pivot points I prefer short trades. Possible entries around resistance of 1.0649 with stop just above that level, and a target of previous support of 1.0508.

Mark McRae

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