The never-ending Greek crisis is set to reach another climax on Sunday with the Greferendum. Recent polls show a tight race and the uncertainty implies high volatility at the Asian open.
What levels should we look at any scenario? The team at BTMU explains:
Here is their view, courtesy of eFXnews:
Bank of Tokyo Mitsubishi (BTMU) is maintaining a wider than usual EUR/USD trading band (1.08-1.14) for the week ahead given the crucial importance of the referendum in Greece on Sunday.
Going into this weekend’s Greek referendum, BTMU is assuming that the Greek public will vote “Yes” given their desire to remain within the euro-zone.
“However, if there is a “No” vote it will make it even more difficult for the creditors to reach an agreement with the current Greek government. Without an agreement the ECB will remain under pressure to pull emergency financing from the Greek banks moving Greece closer towards an exit from the euro-zone placing more downward pressure on the euro,” BTMU argues.
“Alternatively if the “Yes” vote prevails, the current Greek government would likely be replaced by a national unity government tasked with securing an agreement with the creditors. The euro may stage a limited relief rally although a return to relative fundamental drivers would likely see the euro soon come back under downward pressure,” BTMU adds.
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