Slovakia Rejects EFSF, Financial Markets Yawn

By: Regent_Markets

Overnight the Slovak government voted against expanding the EFSF (European Financial Stability Fund). All Eurozone countries must ratify the changes before they can come to pass, so technically the vote failure could derail the bailout plans. In reality, there appears to have been some political horse play involved in this vote, with a second vote likely to pass as early as Thursday.

So although the Slovakia rejection is getting lots of headlines, markets are unperturbed with little significant movement in the euro today. European politicians have a history of getting the vote they need eventually.

Today's top mover is the NZD/USD which is up 0.44%.

Gold is not far behind with the precious metal up 0.42%.

Although the Slovakia vote has note sunk the euro, it has stopped its momentum as the EUR/JPY chart below shows. 105.00 looks like it could be become difficult resistance.

Today we have UK jobless claims change data with the level expected to rise by 24.7k. The unemployment rate is also released with the level expected to stay at 7.9%. Later this evening we have a number of central bank speeches from the FOMC and ECB from 18.20. The minutes from the last FOMC meeting are released at 19.00.

The Bank of Japan's efforts to control the movement of the yen are having some effect with the USD/ JPY stuck in a tight range so far this month. The last few days have been even more extreme with the pair trading with a less than 50 point range. The 14 day Average True Range is now the lowest it has been fore many years.

Even accounting for the Bank of Japan's activities, this tight range is unusual and could provide some opportunity to take a breakout trade.

The direction of the breakout hard to predict, but a move lower might have the better chance.

A good way to play this might be a ONE TOUCH trade predicting that the USD/JPY will touch 76.35 at any point before the close tomorrow. If successful this could return 112%. The trade can be found via the Forex menu and selecting touch/no touch on Betonmarkets platform.

Summary:

Dave Evans
Email: editor@my.regentmarkets.com
Url: www.BetOnMarkets.com

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