Once again, the Euro group meeting on Monday only managed to cloud the outlook for Greece. Officials announced they delayed decision on the next installment of aid to that country. As things stand now, they will discuss it again on November 20. On the positive note, European countries expressed their willingness to extend the deadline of budget cuts in Greece by another two years. Of course, the Troika will have to issue another report on debt sustainability, which could create additional delays. In addition, some national parliaments also have to approve more aid. In short, there is no progress.

Timing of this lack of action was precarious, since Greece is facing a EUR 5 billion debt repayment on Friday. Fortunately, the country managed to roll over these obligations, raising EUR 4.062 billion in 1-month and 3-month maturities. While this number is somewhat short of target, most expect a full coverage when all non-competitive bids are accepted. More importantly, the yield was slightly lower from 4.24% a month ago, averaging 4.2% for the 3-month issue. This means markets have a healthy dose of confidence the aid package will be approved next week. The Euro rebounded slightly, although it is difficult to call it a rally, more like a consolidation after a selloff.

First two trading days of this week were relatively quiet, with most currency pairs consolidating. It is difficult to say if we are looking at possible reversals or only a pause before earlier trends resume. I am going to try a reversal play in the CHF-JPY, using the hourly chart as a guide. If the price climbs to 84.06, I will buy it with objective of 45-50 pips. However, should the price reverse sharply, going short under 83.25 is also under consideration.

Mike K.