Grexit Back On The Menu 

Morning Report: 07.00 London

• Wariness over the latest Greek deal continues, with German finance minister Wolfgang Shauble indicating that a voluntary departure from the eurozone “could perhaps be a better way” for Greece rather than the proposed bailout. This comes amid increasing speculation that the latest deal is self defeating and unlikely to bring a final end to Greek or EU problems.

• Stock markets have rallied heavily this week however, though this may represent the perspective difference form both sides of the Atlantic. The US appears to favour a continuation of the status quo for its trading partner the Eurozone, perhaps glossing over the seismic cracks still in place.

• The US dollar has been strong this week after Janet Yellen hinted at rate hikes coming sooner rather than later.

                           

• Meanwhile, the British pound continues to perform well on a similar theme, with UK rate hikes now possible by January.

                                                             
Coming up today:

• We have a quiet morning followed by a busy afternoon led by US and Canadian CPI at 13.30, released alongside US building permits.

• Following this we have preliminary UoM consumer senetiment.

Trade Idea:

• The only realistic solution for Greece is debt forgiveness and or an exit from the euro, yet politically both are unpalatable. Although likely self defeating, many of the creditor nations needed punishing bailout conditions in order to justify fresh funds to their own electorate.

• The saddest point of this self serving perspective is that all this has been predictable. We’ve known for months, years that Greece cannot support it self and that dramatic action was required. Instead we have another round of ‘extend and pretend’. The Greek crisis is not over and that is why there could be further downside from here for the EUR/USD.         

A good way to play this is a LOWER trade predicting that the EUR/USD will close below 1.0500 in 360 days time for a potential return of 218%. Or put another way, betting that the EUR/USD will close below 1.0500 on July 11^th 2016 could return £31.79 for every £10 put at risk.

Disclaimer: This financial market report is intended for educational and information purposes only. It should not be construed as investment or financial advice and you should not rely on any of its content to make or refrain from making any investment decisions. The views expressed in this report are those of the author and do not necessarily reflect the views or position of Binary.com accepts no liability whatsoever for any losses incurred by users in their trading. Binary options trading may incur losses as well as gains.

Summary: