EUROPE BACK FROM THE BRINK

Dear Readers,

The TASK INVEST AG is currently changing its client approach. In the past, our update market services have mainly been directed towards a German speaking clientele. From now on, our weekly blog as well as our news alerts will be published in English.

'SUMMIT BROUGHT EUROPE BACK FROM BRINK; GREECE STILL FACES FORMIDABLE CHALLENGES; NEW MEASURES ARE NOT SILVER BULLET'

The currencies' sideways trend continues. The financial markets follow and act on events playing out in the control rooms of central banks and political decision makers. A new European summit decision has again come up with a guarantee package allowing the Greek to stick to their scheduled repayments in the near future. Nevertheless, the issuance of commercial bonds would still require the Greek government to pay non-affordable premium rates thus questioning the long-term effect of single-solution-packages agreed to by European financial and political decision makers.

As a result the Euro made its advance - we call it a relief advance - the day the decision to assist the Greek once more was announced. Friday's price action, however, with the Euro being stable and the Yen and Swissie advancing showed the old risk aversion pattern resurface.

This pattern was enhanced by a strong silver performance with a close above 40 Dollars.

A silver expert friend of mine once said 'Gerhard you will see silver rise again in August'. Looking at chart positions today, his forecast seems highly likely to become reality.

Gold, silver, oil, the Swissie and the Yen are still top performers during this year's dramatic financial crisis events. Another of these top events is right ahead of us. There is not much time left for the US to find a solution to its debt limit problems. We are therefore looking at another week of fundamentally driven price movements.

Range trading will be the name of the game at the beginning of the week in currencies. Oil has a chance to establish prices above $100 dollars especially if the debt limit problems are not solved in a convincing way. Silver and gold remain the crisis resistant products this year.

Have a nice trading week.
Yours
Gerhard