Wednesday, February 8, 2012

What Do European Markets Think of the Greek Situation?

The euro is in the middle of a seven week rally.  Prices have advanced from the 126 level, moved through the 10, 20 and 50 day EMA, hit resistance at early October levels but have now advanced through those levels.  The MACD is rising and has just turned positive, while the CMF and A/D lines  are moving higher.  The shorter EMAs are now moving higher, with the 10 day EMA about to cross over the 50.

This is a nice, bullish chart.

The German ETF has similar characteristics to the euro.  Prices are in a strong advance that started at the beginning of the year.  The shorter EMAs are rising with the 10 about the 200 and the 20 about to cross.  Money is flowing into the market as well.

France's chart is a bit weaker than Germany's, as prices are now below their late October highs, but there are plenty of other bullish characteristics.  Prices are now through the 200 day EMA, the volume indicators are rising and the MACD is moving higher.

The UK ETF is now at a six month high, with all the positive benefits noted above.

1 month libor is at .25 -- which is just below its year-ago levels.  Three month libor rose to just below .60 at the beginning of the year, but is now moving lower.

Markets have been understandably concerned about the Greek situation.  However, the above charts and libor rates tell us the markets think the Greek situation will probably be peaceably settled with minimal damage.