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Hello Koalas.

Second day of the week. Remember the aim is to be GREEN.

Yesterday saw bullish action although it was evident that the momentum was slowing down. I reminded that we must consider both sides of the story and while the apparent agreement on the mode of aid for Greece gave the markets a relief, the crisis is complex and we must be ready for unexpected developments. Besides, other Euro Zone countries such as Portugal and Spain are not out of the hot soup yet.

Time for a look at the EUR/USD.

After a near test of the 1.3550 resistance, the currency pair did the unexpected and dives into the depths. A test of 1.3400 looks imminent.

No market stands alone. The S&P 500 is affected, displaying a bearish momentum. Nonetheless, the recent positive sentiments of the US seems to be sheltering the equity index from the main brunt of it.

Oil has fallen from it’s heights. However it remains above $80.

Gold seems to have fallen slightly. Trading now at $1103+, there may be demand due to risk aversion. Gold is usually a safe haven of choice when it comes to uncertainty.

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WHO LET THE BEARS OUT ? BEAR BEAR BEAR

For starters, the managing director of the IMF said that should a loan be needed for Greece, it will be on IMF’s terms. Just like any other country. No special privileges.

This caused concerns as leaders of the European Union would want to maintain control over the process. Investors are worried of a possible fall out of opinions again and are taking evasive actions. The situation is of a fragile one. 12-year Greek bonds offerings obtained less than 50% take up rate.

Next brings us Iceland. Standard & Poor’s lowered its local-currency ratings on Iceland. The rating cut of the European nation came as a firm reminder that many financial markets are still struggling to snap out of the depression of 2008. European Union countries like Portugal and Spain may come into the picture.

On a technical note, a break of 1.3400 may open up space as low as 1.3285 again.

Tomorrow brings us important economic data to look out for. German Unemployment Change and US ADP Non-Farm Employment Change are among those.

Bullish relief may bring us to 1.3455 /1.3550.

A break of the support of 1.3400 may bring us to 1.3360/1.3285.

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