Historical Lessons on the Greek Crisis

Lior Alkalay - INO.com Contributor - Forex

For many investors, this will feel too much like déjà vu by a half; the Greek woes are here yet again. And again, the Greek government is attempting to negotiate a new bailout deal with the Troika, even as European leaders debate whether or not to accede to that request. And, yet again, the question of a possible collapse of the European Currency Union emerges. However, unlike the last time, markets are reacting relatively calmly to the news of the breakdown of the current Greek bailout agreement. In part, that can be attributed to the lingering impact of the ECB’s Quantitative Easing program which was recently announced but it is also in part due to the broad belief that Greece would not likely exit the Eurozone. It seems investors’ two burning questions, i.e. will Greece leave the Eurozone and if it does, can the Eurozone survive, may be hard to disassemble. Nonetheless, it is a fact that, quite often, events in history can teach us as much about the past as about the future and it is those lessons which can help us disassemble those important questions.

Not the First Time for Greece

While the notion of Greece being the E.U.’s Achilles heel might sound like a story of only a few years past, the truth is it goes much farther back. This is the not the first time in relatively modern history that Greece has played a “spoiler” role, and since the Latin Monetary Union no longer exists, it’s not difficult to guess how the first saga ended. In 1865, the Latin Monetary Union became a framework of agreed currency exchanges set by its member states, e.g. Switzerland, Italy, France and Belgium; Greece and Spain joined a few years later. The monetary exchange system, which relied on the value of Gold, basically counted on each country to produce a coin at a specific gold weight that would be matched by all members, thus insuring a de facto single or one monetary currency. Continue reading "Historical Lessons on the Greek Crisis"

Sterling Momentum Softens

Lior Alkalay - INO.com Contributor - Forex

In our last review on the Pound Sterling, we noted that the currency had been weak amid a soft patch in the UK economy. The pace of GDP Growth was slowing and unemployment was no longer falling, yet the robust retail sales figure had provided a bright spot for Sterling bulls. While growth momentum has continued to slow, it has remained fair, and with massive easing coming from across the Channel, i.e. the ECB’s QE program, Sterling was able to gain ground vs its European peer. Yet, with the BoE meeting looming next week, and the release of the February inflation report and Mark Carney’s follow speech, there is growing speculation that the BoE may open the door for a possible retreat, or perhaps even a U-Turn, in its plans for rate hikes. What is that speculation based on and how could it impact the Pound Sterling? Continue reading "Sterling Momentum Softens"

Is The Ruble Meltdown Over?

Lior Alkalay - INO.com Contributor - Forex

The 16th of December will be remembered by investors across the globe, and Russia specifically, as “Black Tuesday;” a day when investors got a quick and unwelcome reminder of the 1998 crisis during which Russia was bankrupted. On Black Tuesday, the Ruble tumbled by 21.1% in less than a day and hit 78.51; Credit Default Swaps (CDS) for 5 years have priced in a 8.8% chance for a Russian bankruptcy. Black Tuesday was, simply put, an utter meltdown; investors were in a panic, Russians were running to the banks and the risk of a total collapse of the Russian economy hung in the air. Yet two weeks later, as some of the chaos from that Black Tuesday began to dissipate, some stability has emerged and with it the Ruble has regained some lost ground. The two questions which beg to be asked and answered; Is it the calm before the storm or perhaps a step toward stability? As we attempt to answer these questions we will also, hopefully, shed some light on the Ruble’s possible trajectory as a consequence.

What Ignited the Chaos?

Although it is still debatable as to what exactly was the last straw, there are clearly two very big contenders. The first was Rosneft, the Russian oil giant, was effectively bailed out by the Russian State through the tapping of the country’s emergency reserves. Continue reading "Is The Ruble Meltdown Over?"

Want a Sure-Fire Forex Trade Setup? Look for a Triangle

Watch this quick educational video from an Elliott wave forex expert, Jim Martens

By Elliott Wave International

Last fall, the editor of Elliott Wave International's Currency Pro Service, Jim Martens, observed a beautiful pattern in the chart of the Japanese yen. This pattern, called a triangle in Elliott wave terms, offers a very clear outlook for the market.

What is a triangle? It's a corrective pattern, meaning that it moves in the direction opposite the primary trend. And, it's very easy to spot on a chart. Here's an idealized diagram of a triangle.

When a triangle ends, the old trend should resume. This allowed Jim to make a very clear forecast for the dollar/yen. Watch this 7-minute video to see the triangle he observed, and the outcome. Continue reading "Want a Sure-Fire Forex Trade Setup? Look for a Triangle"

Is The US Dollar Reversing Again?

It's been a while since we did a video on the euro/dollar relationship. This relationship may be reversing again based on recent price action. In today's short video I point out some of the changes we see happening in this market.

This week could be shaping up to be an extraordinary week in the markets. I strongly recommend that traders everywhere take precautionary measure measures to protect capital.

As always our videos are free to watch and there are no registration requirements. I would really like to hear back from you with regards to your thoughts on this video.

Your comments are welcome on our blog.

All the best,

Adam Hewison
President, INO.com
Co-creator, MarketClub