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Pro Europe New Democracy Wins Greek Elections

Article By: ,  Financial Analyst
June 18, 2012 9:00 AM

Pro-Europe New Democracy Wins Greek Elections. The immediate chaotic outcome of a Syriza victory in the second round of Greek general elections has been avoided, with the pro-bailout party New Democracy being confirmed as the winner after topping the vote count with over 30% vs a 26% from Syriza.
EUR/USD
Range: 1.2673 – 1.2727
Support: 1.2676
Resistance: 1.2745

Euro-dollar closed in NY at 1.2655 with rate marked higher late Sunday as exit polls suggested that the pro-bailout parties in the Greek election had secured enough seats to form a government. The rate edged on from below 1.2700 to an official open of 1.2720 with follow on demand taking the rate on to highs of 1.2748. The rate drifted off highs as the opening enthusiasm quickly faded, the market seeing the result more as dodging a catastrophe than outright optimism that all the eurozone problems have gone away. The rate eased, initially meeting support into 1.2700 before extending to a session low of 1.2674. Asian equity markets reacted positively to the news, with gains across the board providing euro-dollar with a risk-on lift that took rate back to 1.2710 ahead of the European open. Support 1.2676 and resistance1.2745.

GBP/USD
Range: 1.5686 – 1.5730
Support: 1.5692
Resistance: 1.5720

Cable extended gains Friday to 1.5724 with the weekend Greek election result spiking the rate to an extended high of 1.5802 before the early react enthusiasm faded and allowed rate to slip back to 1.5692, settling between 1.5695-1.5715 ahead of the european open. Euro-sterling, which had been pressed to lows Friday of 0.8050, recovered to 0.8111 as the euro was provided by a stronger recovery on the Greek election news, with this rate easing back to 0.80.90 into early Europe. Cable offers seen into 1.5720-1.5725, more toward 1.5750. Support remains from 1.5692 through to 1.5680., a break to open a deeper move toward 1.5650-1.5640.

Gold
Range: 1,618.44 – 1,629.55
Support: 1,617.88
Resistance: 1,631.99

Gold prices are trading modestly lower as risks of an immediate Greece exit from the eurozone subsided after Sunday’s elections saw the nation’s pro-bailout parties winning by a slim margin. Gold initially sank to session lows of 1,606.49 early on in the Asian session, before prices recovered to meet resistance around session highs of 1,629.5. Sentiment remains mixed with flows subject to two-way trade. Asia morning’s early move lower was contributed to some moderate haven buyers, seen last week, exiting the market early expecting a possible stronger risk-on reaction in Asia. Although the risk theme has developed moderately, an air of caution remains about the risk rally being short lived and some returning fear of higher borrowing costs for other components of the eurozone, such as Spain and Italy. Support is 1,617.88 with resistance at 1,631.99.

 

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