The markets seem to be going up and down in the last month of the second quarter. You can tell that these are political stock exchanges, because hardly Greece gives way with a list of reforms, the German leading index DAX gains over 4% in just one day is now at risk again. This is one of the best examples that market technology is only one factor in the whole game and the forces behind it are much greater.
However, in retrospect it often looks like market technology is setting the tone, because a look at the chart shows that the DAX future falls exactly from the upper trend limit at 11,600 points.
There is currently no clear direction regarding the EUR / USD exchange rate. The $ 1.10 per euro could now be broken up and down several times. However, the range around $ 1.14-15 represents a relevant resistance that has not been overcome several times.
The statements by Fed member Powell that the interest rate could be raised several times this year was a signal for market participants to sell the euro. Technically speaking, a double top seems to be forming. It is not clear whether, as everyone previously expected, parity will decrease.
What will happen next?
According to several experts, there will probably be an agreement between Greece and the donors, and the markets are now pricing that in. But this agreement too will only be a compromise that does not solve the real problem of the Greeks. According to the experts, Greece's bankruptcy is inevitable. And because the markets know that, they will only continue to rise moderately. However, a falling euro should be supportive for the EU stock markets.
If, contrary to expectations, no agreement can be found, a sharp slump in the stock markets is to be expected first; as a shock, so to speak, that everyone has now settled on an agreement. The countdown is at least very far advanced, because on June 30 the next tranche is due at the IFW - and it has it all: Greece has to pay 1.5 billion euros to the monetary fund.
But also if there is an agreement, it must first be approved by the Greek parliament before the Bundestag can accept it. The schedule is definitely very tight.
Technically, both the DAX future and the EUR / USD exchange rate are at a crossroads. If an agreement is reached, there is a good chance that the DAX will break through the 11,600 points and thus break the downward trend. Then you could start a long attempt.
The situation looks somewhat precarious in EUR / USD. An agreement would most likely have a positive impact on the euro, but it is questionable whether this influence would be of a long-term nature. At least technically, a break below $ 1.09 per euro could confirm the bearish stance, and a break above $ 1.15 per euro would support the bullish stance.
In the case of the EU stock markets, we currently have political stock exchanges, while in the case of the EUR / USD exchange rate, there are also influences from monetary policy. The Fed's expectations of an interest rate hike in September are confirmed by the accelerating US economy and statements by Fed member Powell.
Accordingly, interest rates could rise twice this year. The markets have so far expected only a one-off, slight increase in September. The second rate hike may not have been priced in yet. On the other hand, the strong euro in recent years was thanks to rising EU inflation. This trend would have to be confirmed, then headwinds can be expected for the US dollar.
All in all, the risk is currently increased. Still, it could be a strategy to opt for an agreement - especially with binary options, because, as is well known, traders cannot lose more than their stake, which, unlike products that deal with stops, is quite advantageous. These stops could be disregarded in the event of major upheavals in the markets, which would put the trader at risk of losing more than he has.
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