Currency news are still dominated by events in Europe. Would anybody believe, that after agreeing to help Greece, with assistance from IMF, about 2 weeks ago, European leadership is still arguing about it? Like peddlers of sub-par goods at some flee market. Not sure exactly what they are still discussing, after all supposedly common ground had been reached before. While this goes on, Greek debt demands 442 points premium over the one issued by Germany. Bizarre situation, considering that all these instruments are denominated in Euro.

Meanwhile, Fitch Ratings downgraded Greek debt by two levels to BBB-, with negative outlook to top it off. This is about junk status when it comes to sovereign obligations. Outlook is negative, because any proposed terms of bailout are not at “discount”, putting in doubt any future repayment by Greece. By late day news became more optimistic, with some prospects for reaching a deal over the weekend, or early next week. Maybe, perhaps, who knows?

Markets interpreted this mess as positive for Euro and the common currency rebounded. Quite strongly, too. This was very good for me, since I was planning a long trade in EUR-CAD at 1.3465. Transaction was triggered on less than positive employment news from Canada. The Loonie lost ground, followed later by strength in Euro. This combined for a nice run up in EUR-CAD.

Towards the end of the day price almost reached my objective, as seen on the chart, within few pips. I got out at 1.3551. for 96 pips gain. Didn’t see much point taking this trade into the weekend, since balk of the objective was realized. The pair dropped slightly over last couple of hours, but closed at about 1.3530 on most platforms. Still good gain.

Other possible trade from yesterday didn’t work that well. In fact, it didn’t even happen. I was looking for a strong bearish candle on 4 hour chart of AUD-JPY, in the zone roughly indicated by the circle. Promising set up finally emerged, but it was so late in a day, that there was no point to enter it then. New week often opens with changed dynamics and right now I’m not sure just how strongly committed to this scenario one should be. I’ll review this over the weekend and decide later.

Mike K.