Those long risk trades like AUD/USD and EUR/JPY would love to see the S&P 500 break out to the topside after a 6-week consolidation. Without confirmation of a move to the topside, markets seem reluctant to hold onto some of these trades, particularly ones with a long euro component.
While everything looks hunky-dory in Greece at the moment, we’re less than a week into the austerity plan, and only a fraction of the debt Greece needs to rollover has been financed, it is too early to declare the all-clear.
Traders are happy to be long euros when it its rallying but less happy sitting through consolidations as the specter of sovereign debt continues to gnaw at confidence.
Share prices are easing, now up only 2 points on the S&P. EUR/USD and EUR/JPY are slipping along with shares. EUR/USD trades now at 1.3633, EUR/JPY at 123.30. AUD/USD is at 0.9145 from 0.9193 highs.
