Hi, this is a copy of the analysis I provided to members of my Forex Mentor Pro group on Sunday, 5th July
As you know the Greek referendum takes place today and NO ONE has a clue as to the outcome NOR even what a yes or no vote will actually mean.
This therefore is completely unpredictable and a possible “Black Swan” event.
Normally by definition http://www.investopedia.com/articles/trading/11/black-swan-events-investing.asp a Black Swan is one that comes completely out of the blue and causes major disruption and often chaos in the markets.
Although they are relatively rare such an incident was seen earlier this year when the Swiss National Bank announced on a Monday that they would continue with their policy of pegging the Euro, only to go in the completely opposite direction later in the week.
The net result ?
Carnage in the markets. Alpari Uk went bust, FXCM only avoided it by managing to raise a $300 million loan and a lot of private investors and retail traders lost all the money in their accounts and some are being chased for more that could see them bankrupted.
On the other hand the “Greek Black Swan” has been telegraphed in advance. I am reminding you here :), its all over the worlds press and lots of brokers took steps late last week to restrict Euro trades and or leverage.
The Bottom line? You have been warned well in advance. If you trade the Euro in the next few days you are gambling not trading. Yes you might get lucky this time, but eventually that level of risk taking will see you blow up your account as sure as the sun rises in the east. Don’t do it.
In the title I used the word hypocrisy. Whatever your opinion on the Greek situation, no matter how the current situation was arrived it, it has and the ordinary Greek people are being made to pay now and forever the impossible demands of the creditors.
Greek pensioners for example have seen their pensions cut already from €700 to below €500 and the latest demands from creditors will see them reduced to around €200, well below what is considered to be the the poverty level of €665 per month.
Interesting article here about Greek Pension crisis CLICK HERE
Ironically many German politicians are the loudest to criticise the Greeks and insist there should be no debt relief. However Germany was THE worst debt transgressor of the 20th Century, being bailed out on no less than 3 occasions. The biggest being in 1953, when at the behest of the USA (who wanted a strong Germany to counter the threat from Russia) they and most of the European countries (including Greece who had suffered immensely from Nazi occupation, both physically & immensely in terms of finance), were pushed into writing off huge amounts of German debt.
As a result the German economy was able to start afresh, raise money in the markets and became the foundation for the industrial power house that Germany is today.
Here is an interesting article from German publication Der Spiegel in 2011 where Munich born Professor Albert Ritschl explains in more detail about Germans debt history and the then current Greek refinancing was never going to work. Der Spiegel
Here are a couple more interesting articles on the subject:
http://www.debatingeurope.eu/2015/03/18/parallels-greece-today-german-debt-relief-1953/#.VZjutflVhBc
Also take a look at Christine Lagarde, head of the IMF and soon to be looking for re-election. In 2012 she had this to say about the Greek situation and was until recently still insisting that many of the problems were due to people not paying their taxes:
“Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax.”Even more than she thinks about all those now struggling to survive without jobs or public services? “I think of them equally. And I think they should also help themselves collectively.”
How? “By all paying their tax. Yeah.”
It sounds as if she’s essentially saying to the Greeks and others in Europe, you’ve had a nice time and now it’s payback time. “That’s right.” She nods calmly. “Yeah.
This is from a woman who earns $468.000 TAX FREE per year!
Equally EU President Jean Claud Juncker who as elected in 2014 promising in July of that year to “try to put some morality, some ethics, into the European tax landscape.”
However In early November 2014, just days after becoming head of the commission, Juncker was hit by media disclosures — derived from a document leak known as LuxLeaks — that Luxembourg under his premiership had turned into a major European centre of corporate tax avoidance. With the aid of the Luxembourg government, companies transferred tax liability for many billions of euros to Luxembourg, where the income was taxed at a fraction of 1%. Juncker.
https://en.wikipedia.org/wiki/Luxembourg_Leaks
I could go on and after a few beers I do! BUT the unbelievable greed, hypocrisy, dishonesty and media manipulation by politicians and big business that is going on in this current situation is a disgrace and a humanitarian crisis in one the founding civilisations of Europe is clearly only a matter of months away unless or until something is done.
The Forex Week ahead
As I stated eariier if you trade the Euro in the next few days you are gambling not trading.
However if we steer clear of the Euro there are quite a few possible trades that I have on my radar, all explained in the video.
Even when the results is know I suspect that as ever the EU will fudge the issue, kick the can down the road and nothing will change, so my bias, once the dust settles will be to continue shorting the Euro
Cad: Looks to me as though we are on our way back to recent highs around 1.2780: Oil is slipping again and this pair broke and closed above major resistance at 1.2400 so I am looking to long there. If that fails I will do so again at 1.2200
Aud. Lots of commodity pairs are falling and this broke and closed below major support on Friday. I am looking for a pull back to short at 0.7590
Nzd: Still in + 530 pips from my analysis 6 weeks ago. If you missed it or are looking to add to it then the top of the channel at 0.6900 is the place or me
$/Yen: Only looking to long, though this pair is very prone to swings if we see shifts in sentiment from risk on to risk off, be careful but 121.40 is one to watch on 4 hour candle closes and if that fails 120.60 is the next area
Gbp/Aud In a daily channel, the bottom of which is around 2.0400
Gbp/Nzd, horrible sized spread, only trade when I am VERY sure but Aud/Nzd looks better bet for multiple reasons. I am watching 1.0770 AND keeping a close eye on fundamentals in UK and New Zealand before getting involved
Euro/Gbp Yes I know I said avoid the Euro ! BUT I show in the video, if there is a major bounce up after the news if it is going to run out of buyers anywhere then 0.7300 is the first line in the sand. If that fails I will wait all the way up to the top channel line around 0.7680 – see the video for more details
Chf: Usually closely correlated with the Euro, but not always. If the Euro does surge up then watch 4 hour candle closes for possible bounce back down at 0.9500 yet again BUT its higher risk than I like
New members please note: If I am looking to take a trade long, at for example 1.5000 , I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads. We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
For more up to the minute updates do not forget to drop by the forum
regards
Marc Walton
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