Greece on a diet for EUR recovery - By Reymount

The EUR returned to a level above 1.3230 after confidence was restored in the 17 country currency by the passing of the Greek bailout. Default is still on the horizon as the terms imposed on Greece are harsh and have drawn criticism from economists who warn that the lessons from Argentina should not be forgotten.

Greece has the difficult task of cutting its deficit from 160 percent of GDP down to 120 percent while in the midst of a recession. It is clear what the EU got out of this deal. Greece is likely to default as the social pressure will be too intense and the proposed tax increases and wage cuts will bring protest to the streets.
The real winners are Italy and Spain which get to decrease their yields as the ECB has bought them time.  Spain’s 10 year bond yield is 5.08 percent down from last year’s high of 6.7 percent . Italy’s 10 year yield is down to 5.4 percent down from 7.1 in December. Will this extra time be used wisely is the question?
Which leads to the uncertain part of the deal. Greece is the first of the so called PIGS to be in this position, not the last. Portugal, Italy and Spain are expected to join if they cannot get their economies in order. But that is easier said than done as proved by Greece. The EU hopes that Greece (the smallest of the PIGS) is the example that the other’s will follow, and worst case scenario will serve as the example of what not implementing austerity measures in the first place will get you.

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Forex Technical Analysis for Week 02/20—02/24 By Reymount

Floor Pivot Points
Pair	3rd Sup	2nd Sup	1st Sup	Pivot	1st Res	2nd Res	3rd Res
EUR/USD	1.2674	1.2824	1.2984	1.3134	1.3294	1.3444	1.3604
GBP/USD	1.5475	1.5559	1.5692	1.5776	1.5909	1.5993	1.6126
USD/JPY	75.80	76.58	78.06	78.84	80.32	81.10	82.58
EUR/JPY	99.82	100.81	102.68	103.67	105.54	106.53	108.40
GBP/JPY	118.61	120.14	122.99	124.52	127.37	128.90	131.75

Woodie’s Pivot Points
Pair	2nd Sup	1st Sup	Pivot	1st Res	2nd Res
EUR/USD	1.2827	1.2989	1.3137	1.3299	1.3447
GBP/USD	1.5571	1.5716	1.5788	1.5933	1.6005
USD/JPY	76.76	78.42	79.02	80.68	81.28
EUR/JPY	101.03	103.12	103.89	105.98	106.75
GBP/JPY	120.47	123.65	124.85	128.03	129.23

Camarilla Pivot Points
Pair	4th Sup	3rd Sup	2nd Sup	1st Sup	1st Res	2nd Res	3rd Res	4th Res
EUR/USD	1.2974	1.3059	1.3087	1.3116	1.3172	1.3201	1.3229	1.3315
GBP/USD	1.5705	1.5764	1.5784	1.5804	1.5844	1.5864	1.5884	1.5943
USD/JPY	78.31	78.93	79.14	79.34	79.76	79.96	80.17	80.79
EUR/JPY	102.98	103.76	104.03	104.29	104.81	105.07	105.34	106.12
GBP/JPY	123.43	124.64	125.04	125.44	126.24	126.64	127.04	128.25

Tom DeMark’s Pivot Points
Pair	EUR/USD	GBP/USD	USD/JPY	EUR/JPY	GBP/JPY
Resistance	1.3214	1.5951	80.71	106.04	128.14
Support	1.2904	1.5734	78.45	103.18	123.76

Fibonacci Retracement Levels
Pairs	EUR/USD	GBP/USD	USD/JPY	EUR/JPY	GBP/JPY
100.0%	1.3284	1.5861	79.61	104.66	126.05
61.8%	1.3166	1.5778	78.75	103.57	124.38
50.0%	1.3129	1.5753	78.48	103.23	123.86
38.2%	1.3092	1.5727	78.21	102.89	123.34
23.6%	1.3047	1.5695	77.88	102.47	122.70
0.0%	1.2974	1.5644	77.35	101.80	121.67

GBP/JPY — Double Bottom (Sort of) on Weekly By Reymount

GBP/JPY has formed a pattern that looks like a double bottom on its weekly Forex chart. It ends the descending trend wave that has started back in August 2009, which itself is a part of the longer downtrend with beginning in July 2007. The pattern isn’t perfect — the second bottom isn’t exactly on the same horizontal line as the first one, and the price haven’t rose to the initial point of the pattern yet, so it may still form symmetrical triangles, a continuation pattern. But, nonetheless, it’s a good a setup if you don’t jump into a trade right away.

I use the horizontal channel setup as the entry/exit system for this double bottom pattern. The borders of the ”channel” are marked with the yellow lines on the image below. The entry points (cyan lines) are located at +/-10% of the ”channel’s” height. Green lines show the probable targets of the breakout trades — they are located at +/-100% of the ”channel’s” height. Stop-loss can be set to the low/high of the breakout bar or the bar preceding the breakout. You can click on the image to get the full-size chart:



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