The EUR/USD continued to be the epicenter of the financial world as the Greek elections loom on Sunday. The markets were going back and forth to the headlines over the course of the afternoon in America as the headlines of various central banks around the world offering to provide liquidity to the various markets around the world. However, the excitement of central bank action has been getting shorter and shorter and it may be that the “pop” that we could get based upon the easing or boosting of liquidity by central banks will be less lasting than the last couple of times. Also, there is a question of how long it will take traders to ask just how bad things really area out there.
The pair gained after first falling for the session, and a lot of those gains were realized in a very short amount of time during the afternoon in New York as these headlines hit the wires. Based upon the mentioning by several central banks of liquidity measures, it looks as if the central banks out there are very concerned about the repercussions of the Greek election on Sunday. In a lot of ways, this looks like a preventative measure by realizing this information ahead of time in order to cushion the blow from an “anti-austerity” win in Greece.
The recent highs at the 1.2650 level will look to hold this pair back, and as a result we could see a drop from that level. The fact is a lot of traders may be looking to get out of the markets and flat before the weekend. It is because of this that there will more than likely see a lot of short-term shorting opportunities in the afternoon today. The markets could easily be very whippy during the session, and as a result it isn’t necessarily a bad idea to remain flat as the volatility could be exacerbated by lower liquidity as large funds want to be out of the Forex markets before this unforeseen election result and certainly market moving event.
Written by FX Empire