Once more, another gathering of the EU finance ministers has ended up in a fiasco. Actually, this begs the question-- when was the last successful meeting? Apparently, this time there are some technicalities still remaining unsolved and the officials have done what they lately do best and more often: they kicked the can down the road to next Monday, where they would meet again, although the results are of course not guaranteed. The bitter conclusion is that Greece will have to wait a bit longer to get the next tranche of financial aid. The euro has subsequently dipped from levels above 1.2810 to the proximities of 1.2735 against the greenback soon after the announcements, although EUR/USD has found some support after the opening bell in London.
… What's next in Euroland?
There is nothing much Greece can do apart from complaining on technical details and irrelevant issues, but just sit on its hands and wait… and cross its fingers. The other protagonist of the euro saga, Spain, enjoys its days in limbo, ignoring the worsening conditions in its domestic economy or the wider euro bloc, sedated by positive results in last bonds / bills auctions.
Anyway, ahead of the next EU Leaders Summit on Thursday and Friday, and the thin trade expected from tomorrow's holiday and Friday shorter session in the U.S. markets, the euro would continue to be under pressure, as the politicos would be in centre stage once more, guaranteeing volatility and rumors.
In the view of Karen Jones, expert at Commerzbank, technical studies would suggest declines to the 1.2660 region en route to deeper levels around 1.2480. "EUR/USD is showing signs of failure at the resistance line at 1.2842 - we should see this together with the 55 day ma at 1.2903 hold the topside and provoke failure".
… Thursday in the eurozone
Yes, another EU Summit will kick in, due to the last two days and finish on Friday. Once more, risk trends will be put to the test since early morning after preliminary manufacturing PMI prints in China, preceding a batch of same results in the eurozone and the bloc composite. A key Spanish 10yr Obligaciones would challenge the last downtrend seen in yields, followed by a measure of consumer confidence in the euro bloc.
There will be no activity in the U.S. markets as they are closed due to the observance of the Thanksgiving Day.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.