30.05.201710:42 Forex-elemzések és áttekintések: Global macro overview for 30/05/2017

Global macro overview for 30/05/2017:

Two important news for financial markets hit the newswires overnight. German "Bild" newspaper reports that Athens are prepared to refuse to pay the next tranche of the loan if lenders fail to agree to write off part of the country's debt. Refusal of repayment means an increase in the risk of bankruptcy and the revival of Grexit. The Greek economy contracted by more than 25% since the start of its financial crisis and after the fail in reaching the agreement with lenders last month, the Greek finance minister Euclid Tsakalotos made an urgent appeal to Brussels to extend the 86bn Euro in debt repayments. So far, Greece introduced and executed highly unpopular reforms to produce savings of 2% of GDP, which is clearly not enough to stop the recession and repay the creditors.

In Italy, the scenario of accelerated elections in the fall is now even more real, if the main political parties agree to change the electoral system in June. As the currency union (Eurozone) is blamed for Italy's economic problems, the election increases the risk of eurosceptics coming into power.

It looks like the old fears are now coming back to haunt the Eurozone. Both situations are clearly increasing the uncertainty in the financial markets and the Euro currency might be greatly affected in the coming weeks. The volatility might get increased as the market will be reacting to every news regarding those two countries.

Let's now take a look at the EUR/JPY technical picture on the H4 time frame. The price bounced from the technical support at the level of 123.26 in oversold market conditions. Nevertheless, to regain the control over this market, the bear camp must break out below the strong support between the levels of 121.97 - 123.26.