The last trading day of the week was quite volatile on the positive, as the market has not only left the panic about China and Greece, but there was hope that already next week will bring peace and stabilization on all fronts. The last few days of feverish markets and in connection with the collapse of the stock of assets, is observed in China and due to the very protracted debt problems in Athens. Against this background, the currency market was tossed from side to side: the first half of the week in demand risk-free assets US dollar and the yen, and is closer to the output of interest to sold risky assets began to recover again. Several officials on Friday confirmed that an agreement with the Greek authorities may even before Sunday. As a result, EUR / USD is trading above the closing 1,1150, GBP / USD – in the vicinity of 1.55 and USD / JPY – in the area of 122.70.
Stock indexes have suffered the loss of an impressive early in the week, the ball is ruled by the Asian benchmarks came under a wave of sales of the Chinese Shanghai Composite and Hong Kong’s Hang Seng. The Chinese government quickly intervened the situation and were able to limit the collapse, triggering a correction of the stock of assets around the world. But hopes about Greece only complemented the positive picture Friday. Commodity markets also did not remain on the sidelines. Brent crude oil recovered in the area of 58.7 dollars per barrel after falling to a 2-month low of 55.00. Gold traded near $ 1163 per ounce after the collapse of a four-month-old in 1147 at the beginning of the week.
Chart of the day:
Economic data Friday:
- Greece and the EU have come very close to an agreement on the debt
- The Chinese stock market continued to grow
- An independent agency of the US Department of Energy (EIA) forecasts a drop in demand for oil in 2016 to 1.2 million barrels a day
- The conclusion of the agreement. DAX steadily moving up with the immediate goal at the level of 11870, because now in addition ultrasoft policy demand for assets will support the positive resolution of the debt problem in Greece.
- A delay in the negotiations. DAX will return to the area of 11,000 and will make an attempt to break below waiting for new news, but any comments on the topic closeness of the agreement will cause short-term upward movement.
- The failure of the negotiations. DAX have fallen sharply with the probability Pack 5-month lows, followed by a period of consolidation and the gradual recovery of the index in connection with the return to the scene threads ultrasoft policy of the European Central Bank.
Commodity and raw market
For Brent coming week can be as volatile due to the large number of influencing factors. It is likely that the asset will play scenario last week: on Monday the price again come under pressure due to the “deadline” for negotiations with Iran and the possibility of their completion. Expectations release oil exporter to the market will put pressure on the asset. However, in the second half of the week, investors will begin to look around in search of additional factors of influence, as a full increase in supply from Iran can only happen in the next year and maybe later. So, to replace the subject of Iran come expectations demand for oil from China and Greece, and if by that time we will see some positive changes in solving related problems, Brent may again resume growth and to consolidate above $ 60 per barrel, with a probability of achieving district 62.00 dollars per barrel.
Do not forget about gold, which has suffered a lot on the threat of recurrence of the Asian crisis of 97-98 years, but the main actor in the form of China. Recall that in the period of the collapse of the Asian economies, the precious metal is not in demand in spite of its recognized role of “safe haven“. The fact is that China and India are the main consumers of gold, so any reminder of the end of the last century caused a similar dynamic. Therefore, to predict the dynamics of the XAU / USD makes sense to monitor the status of the Chinese stock market and economic data from China. The trade balance, retail sales, industrial production and GDP for the second quarter will provide enough food for thought. The overall positive tone in this regard, be able to support the growth of XAU / USD at around $ 1171.60 per ounce.
And now for the main intrigue. Output can bring very serious surprises for the financial markets around the world, as it was on a Sunday can finally end the “Greek saga“. However, I enjoy it too early as the offer for which was rumored to have decided to accept Athens, very similar to that against which 61% of the population voted in a recent referendum. Firstly, within the current Greek party can be observed certain opposition to the decision of Tsipras. Secondly, Germany itself is very reluctant to write off any debts, most of which will fall on her shoulders. Thus, despite a very high chance of an agreement, the risk of failure of the transaction still exists. We hope that you have closed all positions on the euro and other European instruments before the weekend, so now we have to react to the results.
- The positive scenario. The agreement may send EUR / USD above 1.12, after which period may be some consolidation and then smooth over the sobering weakness of the eurozone in the light of what is happening, and the return of the pair in the downtrend. At any of these stages, you can try to earn.
- Moderately negative scenario. The decision on the agreement once again postponed, which will have some pressure on the EUR / USD to return to the area of 1.10, but the whole waiting period the couple will experience high volatility with possible jumps back to the 1.11 area on hopes for the best.
- Negative scenario. Lack of agreement will cause even more violent reaction, as it will mean the exit of Greece from the eurozone. EUR / USD may lose 1.5-2 minute figure, even after a time of consolidation in the scale will remain downward trend influenced by a large number of negative factors.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for informational purposes and do not guarantee the results obtained.