Impact In Forex Markets

In France, the projected winner, socialist candidate Hollande, introduces near term uncertainty because some of his stated policies are at odds with those of Germany, and thus threaten the unity of the EU’s Franco/German leadership.
That makes some kind of EUR pullback likely.
Whether that pullback lasts depends greatly on whether he succeeds in calming markets by appearing conciliatory and flexible towards Germany.
An upset Sarkozy victory avoids that uncertainty and so would likely be positive in at least the short term for the EUR.

In Greece, The result is less likely and the risks to the EU are greater.
Opposition parties did not provide written commitments to fulfill enact austerity steps demanded by the International Monetary Fund (IMF).
That means that if they win the elections, it could end further aid that may result in a messy Greek default that could spark a panic induced wave of similar sovereign and banking defaults.
That is, unless the ECB and Germany agree to engage in a new round of aid or money printing to fund yet another bailout.
If the past years are any guide, after a bit of drama Germany gives in and opts for avoiding a crisis now, at the risk of a bigger crisis later when Greece defaults on yet even more debt.

Delayed reaction to US jobs data, especially in Asia

Since US jobs reports come out after Asian markets close, its reaction doesn’t come until the start of the following week.
Unless some great news comes out before then to balance the bad US job figures, Asia should open lower.
The above elections could provide that balance, or greatly exacerbate the negative response from Asia.
That makes market response to these elections important, because a strong pullback in Asia to start the week could introduce an additional bearish factor.

Breaks below technical resistance levels

As noted in our weekly review last week, many closely watched markets are now testing strong support after the prior week’s pullback.
A significant break below that support risks setting off a wave of sell orders and pullback that could feed on its own growing momentum as that breaches multiple support levels.
Many risk markets like the S&P 500 remain near multiple year highs despite months of steadily growing signs of slowdown.

Coming bank downgrades from Moody’s

As we noted last week, Moody’s would release credit rating updates starting in early may.
Given the relatively light economic calendar this week, surprises here could have a disproportionately large influence on markets, for good or bad.

Bond sales

Italian bond auctions on May 11 and 14 will provide the latest look at Italy’s creditworthiness.
A surprise here too could have an unusually strong influence on market sentiment.

Well this is all for now, hope this helps in making good decisions on your binary investments trades.
Happy Trading and enjoy….

Posted in Featured, Forex, Options Tagged with: , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *