The EUR/USD continued the upside move most of Tuesday on regained faith in policy makers ability to contain the debt crisis and prevent the Greek default as talks head forward with banks over their voluntary participation in the second bailout for cash-strapped Greece.
The focus on the upbeat factors offset the prevailing negativity in the market and the downside pressure from awaiting the vote from the Greek parliament and helped a market desperately in need of some positivity of a correction badly needed.
With the rally seen on Tuesday, some of the gains might be limited on Wednesday with the vote from the parliament on the new austerity measures in Greece expected likely at night, and with the optimism over the measures to pass some of the relief rally will be slowed after the gains, while a block on the measures will be surely more devastating!
The focus will remain on the parliament and the final vote, with already a sign of relief that the parliament will have to pass the package considering they do not have other options.
Trading will remain choppy on Wednesday as the investors await the vote which if assured positive will support the euro strongly higher, and return the focus on eased jitters for now and signals from the ECB for higher rates indeed next week. Yet we need to assure you again that if the parliament blocks the austerity package and does not endorse the new measures, Greece might not attain the bailout loans or a new package and the nation might default within weeks and that is the first notion to be prices and accordingly a strong global selloff will be seen!
As investors await the vote from the parliament some data from the euro area and the United States are on the queue for release and in general trading will remain mixed, cautious, and choppy until the vote is final.
The euro zone will start the data for the week at 09:00 GMT with the confidence survey for June. The Business Climate index is expected to slow to 0.89 from 0.99. Economic Confidence to slow to 105.1 from 105.5; industrial confidence expected at 3.3 from 3.9 and services confidence to slow to 9.0 from 9.2 and finally consumer confidence is expected unrevised from the flash estimate at -10.
From the United States we have Pending Home Sales for May at 14:00 GMT and expected with 1.0% drop following the previous month’s slump of 11.6%.
Written by ForexMansion.com