Greece that it actually has money until mid-November managed to overcome some negative headlines (05-Oct-2011)

Some positive headlines regarding a bank aid plan and a sudden acknowledgement from Greece that it actually has money until mid-November managed to overcome some negative headlines.
It allowed EUR/USD to make a significant comeback and return to just where it closed on Friday. Here are 7 highlights:

1. Greece suddenly realized that it has money until mid-November, just after the troika decision was delayed to that period of time.
2. The Financial Times reports that the EU is working on a plan to bailout the plans. Both headlines fit perfectly into the talks of a Greek default at the beginning November, and a preparation till then.
3. The French and Belgian governments and central banks pledged to back Dexia, declaring that deposits are safe.
4. Italy was significantly downgraded by Moody’s – by 3 notches. The statement includes wording about further “substantial” downgrades on the way.
5. S&P left Portugal’s credit rating unchanged, but the outlook remains negative.
6. German chancellor Merkel warns of dangers of a Greek default.
7. Ben Bernanke warns of the dangers of a disorderly Greek default.

The timetable is more flexible now that Greece can take its time until mid November. The focus returns to the banks.

EUR/USD fell as low as 1.3144, setting a new 8 month low, but bounced very nicely. 1.3360 serves as a strong cap – this is the area where the pair closed on Friday

By
M.Zohaib Gadit
Forex Trading Consultant