Daily Market Review 22 of May

OVERVIEW


The stubbornness of Greece to fulfill its obligations to the EU and the IMF creates a dilemma for politicians either to refuse giving any more funds to Greece or to put up with the situation. In the second variant even in case of success in forming of a new government after elections, there is an intention to reconsider the conditions of aid allocation. The concerns of the investors about the realization of the first scenario are a negative factor for the Euro though the second one doesn’t promise anything good for the Euro bulls as well. It will be a bad example for other peripheral countries and eventually will just postpone the undertaking of incremental stimulating measures. The analysts note that the pressure on Germany to take a tough stance is growing and the majority of suggestions regarding this issue at the EU summit presume additional guarantees and bigger risks. In the long term it presents a threat of investors’ loss of trust to the nucleus of the EU.


EUR/USD

The Euro grew against the US Dollar yesterday. Analysts warn that there should be no illusions about the Euro stabilization in recent days. The forecasts for the Euro are quite gloomy. The failure of the second round of elections in Greece in June will most likely bring the country to the default and subsequent abandoning of the monetary union. That’s why the level of 1.1500 is assumed to be a real goal for the Euro.



GBP/USD

Yesterday the Pound grew against the US Dollar. The British currency has a chance to continue growing up to the Resistance levels at 1.5884 and 1.5956. Though if the sales of the Euro resume than perhaps the Pound won’t avoid sales’ pressure as well. The goals in such a case will be 1.5730, 1.5640 and possibly below 1.5550.