This Friday is another day in the financial markets. All investors are focused on the elections in Greece to be held on Sunday, the result is totally uncertain.
The two dominant parties, Syriza and New Democracy, are leading the polls, and there is a clear advantage in recent polls taken this week in favor of either.
However, it is clear that a leftist victory, representing Syriza, which purpose is to get out of the euro as soon as possible and return to the old drachma (that will fall very well known Forex advertising firm, in other words " the drachma is easy to operate ", as the devaluation of it will be huge). If the victory goes to the New Democracy, the picture changes, but not much.
No party wants to pay the political cost of seeing its population remains impoverished, with the immediate history of the fall of Papandreou, and the weak current government, who could not even form a coalition government as it tried recently.
So, no matter who wins, everyone will try to negotiate with the rest of Europe about the conditions under which he was paid the money and he came to Greece to avoid falling into default, as it happened in March.
The question that arises is whether Greece’s leaving in the international context will determine that the euro will disappear? It is above all a political signal, strong, no doubt, but no more than that.
The opening of the Asian session on Monday will be dramatic, because the gaps are enormous and very sharp price movements occur.
It takes a few days to normalize the situation, and then return everything to normal. What is the problem? The real problem is to take highly leveraged positions today, and not knowing what to do with them this afternoon at the close of U.S. session.
No one can seriously believe that Europe will leave a political project discussed, that was set in error, because so are all the projects, but that is framed in a much larger project, which is to prevent a continent whose wars have been a constant in its history, continue to occur.
Europe has achieved, at least in the most part of the continent, to remove the borders. Having the European passport one can go from one end to another without much explanation. The major powers, with nuances, have moderated their political views, seeking continental unity. And because Greece takes a different decision, important part of that project, which is a further unifying currency to a continent, such as the euro, will disappear.
Sure, you read George Soros, saying that the euro has remaining 3 months of life, Christine Lagarde, replying that the term is much shorter and it stands to reason that things are too bad. Not well, but remember, dear reader, that not only you want to win in the market that you only use information you given, you are not forming news. These characters are with more interest and more shameful than yours.
What may happen during the day on Friday? Not much, indeed. Although try not to enter the U.S. market after noon, because that strange movements begin to occur, similar to profit-taking end of the month, or quarter and future actions.
It's rare, but now we must talk more than they can spend the day following that of what can happen now. The euro remains at a level that is comfortable in circumstances between 1.25 and 1.27, be ready to fire in any direction before the Greek election results on Sunday.
But there will be more than a boost. If possible, stay out of the market, wait for the momentum, and when everything returns to normal, and when the opinion makers stop predicting the end of humanity just because Greece is with the euro or not, when inflation rate and reports on employment appear or the GDP data are released, then they will be back in the headlines, and all will stop talking about chaos, drama or panic. No one saves an account for operating in the chaos, and yes you can lose everything in minutes.
The rest of the market from a tier seems to look what happens to the euro. The pound sterling sides completely, and seems to expect a story to quickly cross the barrier of 1.56, which has been denied these days. The Australian dollar points to a par with gold, like the Canadian dollar and Mexican peso, which is away from their lows, following the weak but has partially recovered WTI.
And the yen? Again it is very high, after the Bank of Japan kept its monetary policy unchanged (with 0.1% a year is not much room for maneuver), and that markets will predict a flurry of yen in the market to devalue, thing did not happen.
Rest assured markets have sufficient mechanisms to create waves of panic, and being put in place at these times, but it is just that. The euro will continue to exist, and as always, it will not be easy to operate, like the rest of the currencies.
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Performed by Gerardo Porras, Analytical expert
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