The U.K. GDP data was slightly worse than expected. Major U.K. banks must raise a total of £25bn in extra capital by the end of 2013 to guard against potential losses, the BoE said. Robert Peston does have a point when he sayd, "Cyprus is a reminder that the notion of the banks having to absorb big additional losses before too long is not a purely academic one". The U.K. finance sector needs to tread carefully here; cash rich is a good way to be, the challenge for banks is securingthat capital.
Interesting article in Der Spiegel - was Jeroen Dijsselbloem actually telling the truth about the Cyprus bailout, or just being overly honest. Perhaps Cyprus really is a completely unique situation, as many quickly interjected after his comments.
Despite German Unemployment and U.K GDP figures, Wednesday's focus will be on the Cyprus Banks reopening. Italy is also expected to make an appearance with possible developments on it's yet-unformed government..
Draft of Cyprus Capital Control Rules:
1. You cannot cash cheques.
2. You cannot pay without cash or transfer money outside Cyprus with the following exceptions:
- Commercial transactions which are “normal” to the client after providing explanatory documentation. Documentation only required for sums above 500 euro.
- Wage payments outside Cyprus
- Holiday travel expenses of 10k per quarter and for tuition of students above
- Payments or transfers outside Cyprus using credit or debit card or prepaid card, up to 5k per month per person for each bank
- Payments to insurance companies
4. You can’t transfer banknotes/coins in euro or other currency above 3k eur, per person.
5. Financial transaction/payment/transfer is also captured by the restrictions.
6. A credit institution cannot perform payments without cash or transfer money in a way that circumvents the restrictions.
7. Restrictions apply to all accounts, transfers, payments irrespective of currency.
Does this mean that the euros differs from jurisdiction to another? How does this apply to enforcement despite the same exchange rate?
We'll wait for tomorrow's tomorrow to the initial capital controls enforced, and whether there is any significant impact on banks in Cyprus.
Remember: it is also the end of the month; the Easter break is kicking in and markets are closed on Friday.
EUR/USD
The pair pushed lower in the European session again, then remained pretty flat in the U.S. session. Retail Traders remain net long this pair, we continue to prefer short entry signals.
Our intraday breakout system has been doing well on this pair, trading breakouts from initial ranges each day.
We continue to like this pair for a move down to 1.26, but could see it bounce to test the 200 day SMA again.
Personal Bias: Bearish
Support: 1.2730
Resistance: 1.2880 (200 day SMA)
Strategy: Intraday breakouts or 4hr price rejections of higher prices to enter shorts.
GBP/USD
The pound pushed lower on weaker GDP figures. We still like this pair short, but are waiting for clear price rejection signals or a break of recent support levels for a good entry trigger.
Personal Bias: Bearish
Support: 1.5100 / 1.4800 (monthly support)
Resistance: 1.5200 / 1.5260
Strategy: Waiting for clear short signals.
AUD/USD
The pair dropped today, and is starting to look really attractive for short options. We will keep an eye on the weekly close tomorrow, as a weekly trendline could offer good short options.
The orrder book started to move towards net long on the move lower today, which gives a good contrarian sell signal once complete.
Personal Bias: Neutral
Support: 1.0365
Resistance: 1.0480
Strategy: Standaside
USD/JPY
No real movement from the pair. We remain neutral given the mixed positioning of Retail Traders.
Personal Bias: Neutral to Bearish
Support: 94.50 / 94.00
Resistance: 96.30
Strategy: sidelined - wait for clear entry signals.
EUR/GBP
Further short signal on the EUR/GBP offers good risk reward on a move lower towards the 0.8300 handle. Wide stops are needed for market entry. We prefer waiting for a bounce to enter short.
USD/CHF
Nice set-up on the USD/CHF, which is also playing with the weekly momentum. Retail order still points to shorts, but it has been moving towards Bullish territory. The pair gapped lower today. Although we would never jump back on a trade normally, we really like this setup. It offers a good option to wait for a break out high prior to entering for the more cautious approach.
Pair pushed higher today. Retail traders started to short it, which could point to further moves higher.
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