Greece 8211 8216 staying alive 8217

The FX markets remained quiet in Asia as most of the region celebrated the lunar holidays. The price action is obviously dominated by the saga of Greece’s membership in Eurozone, with a Eurogroup meeting this afternoon in Brussels likely to produce some very volatile price action for the single currency.

Greek Finance minister Yanis Varoufakis officially sent a request for an extension to the current lending facility to Jeroen Dijsselbloem, the Chairman of the Eurogroup, stating that Greece will honour their financial obligations. The request was quickly rejected by the German finance minister who branded the proposal as ‘insufficient’, adding that Greece are looking for ‘bridge financing without fulfilling the demand of the programme’. The meeting this afternoon and the subsequent decision to accept the Greek loan extension proposal, which would allow ministers six months to thrash out a new deal, needs to be a unanimous outcome. So unlike the ECB meetings, the Germans could actually scupper a majority decision.

I must warn traders that I don’t rule out a last-minute decision and agreement to be made over the weekend, which will undoubtedly have a large gap effect on the FX market.

PMI data from Europe this morning showed a mixed picture as the manufacturing component disappointed. The service sector surprised to the upside as UK retail sales (excluding energy) came in below consensus at 4.8% – as the major UK retailers had already suggested.

EUR/USD
Supports 1.1300-1.1260-1.1100 | Resistance 1.1380-1.1450-1.1520

USD/JPY
Supports  118.10-117.25-116.80 | Resistance 119.30-120.50-122.00

GBP/USD
Supports 1.5320-1.5280-1.5150 | Resistance 1.5450-1.5490-1.5530