Tsipras calls a referendum on bailout!
Returning home on Saturday night, Tsipras went on television to declare a referendum on EU bailout proposal from creditors, set for July 05. Today, the Greek parliament with 151 votes easily gives green light to the same. Greeks are due to vote on whether to accept or reject the latest terms offered by creditors to Athens, in order to unlock billions of euros in bailout funds. The decision and the future for Greece is now in the hands of the citizens. Hm, nice call from prime minister Tsipras. He didn’t want to make such a decision by himself. How I see this? I see that this could be huge problem for Greece now. Why? Well, on my oppinion the citizens will vote caught up with emotions mostly and that could be dangerous for the referendum result. But, whatever the result came out on July 05., the Greece will have a big problems. In my opinion much bigger if they vote against the bailout program. Grexit is inevitable in that scenario! Now, it could become a realy interesting in the financial markets. Let’s get ready for another exciting week. But, which one is not in the foreign exchange market, right!? 🙂
Forex Trader 
Absolutely as it would be a step further towards monetary union. If monetary union is to occur then Euro bonds are the next step. There is a long way to go though Euro bonds would be a very substantial leap in the right direction. It would test Super Mario’s statement ‘whatever it takes’. In my opinion whatever it takes includes Euro bonds. If there is positive discussion around Euro bonds there will almost certainly be a rally because with Euro bonds, the Euro will look less like a bag of pegged currencies. I do think Mr Tsipras is probably doing more for European Monetary Union that all others leaders in the Eurozone put together. His actions are exposing the very serious weaknesses and my hope is that the Eurozone leaders will take action to address those weakness. France has got to take lessons in budgetary responsibility and Germany has got to become less of the school bully. However whatever is happening there are a lot of positive opportunities emerging and I believe we will be seeing a stronger Eurozone which in the long term will reflect in the value of the Euro. From a technical perspective there must be a test below parity and when this has happened, the Euro will start to strengthen. I see the future EUR/USD chart looking like the past USD/JPY. With that chart an all time low was made and the pair has recovered to the highest levels seen for over ten years. In the long term I do see EUR/USD heading towards one Euro buying two Dollars. It is likely to be three or four years away and maybe more. However I do believe it will happen.
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Interesting times ahead. It was an outcome that I did not expect and certainly before this weekend had not be mooted in the press. It is very much a heads I win tails you lose for Mr Tsipras. What ever happens in the referendum, he will have retained his political credibility. Whist I am not with him on the colour of his politics, as a Greek leader he gains my respect. I think we are going to see the EUR/USD flap around for the whole of the week – AKA range trading. Unless Brussels really starts talking about real monetary union, I think that there will be a general decline towards 1.10000 with rallies maybe going as far as 1.4500. Certainly there will not be any big price fall and almost certainly no trends establish – I think though I have been wrong in the past. The other thing is that Greece has dominated the news for almost as long as I can seem to remember. The Greek people will be voting not only on the future of their country within the Eurozone but also the future of the Eurozone. If Greece were to leave that would possibly set the president for others leaving such as maybe Portugal. It would demonstrate to the market that the Euro is merely a bag of pegged currencies.
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We have forget about this, but what do you think, is there a possibility of ‘Euro bonds talk’ now? How would market react on that, or this situation with Greece is not good timing for that!?
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