| Market Analysis Forex - 03 11 2011 |
 EURUSDDuring the night, German Chancellor Angela Merkel and French President Nicolas Sarkozy stressed what is at stake with the Greek referendum. On December 4th, Greek citizens will have to decide if they agree to honour their past commitments and remain in the Eurozone, or if they want to exit the Euro. In the meantime, financial assistance from Member States to Greece will remain frozen, pending vote results. After long discussions, European leaders are now expecting the worst and are preparing to defend their own economy from the shockwaves that would cause a Greek exit. In the current climate, new ECB Chairman Mario Draghi will expose today the bank’s monetary policy and economic projections. Given the current instability, any indication that the ECB is ready to lower its benchmark rate could provide further weakness in the euroagainst its major counterparts, while - at the same time - limit the selloff in equity markets. GBPUSD The GBPUSD pair topped yesterday morning the $1.6030 resistance, on the back of a surprise rise in UK builders’ confidence in October. However, positive US ADP numbers and the FOMC decision to maintain its monetary policies unchanged restored buying interest for the US dollar in the afternoon session, and pushed the pair below the $1.5970 support. Following the French-German ultimatum to Greece, selling pressures have intensified on the GBPUSD and have confined the pair around the $1.5890 support line. The one-month window left until the Greek referendum is a source of lot of concerns, as a prolonged period of instability can rapidly deteriorate UK’s and Europe indicators. |
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