SYNERGY FX ALERT BY TODD DEITERICH | 25.05.15

WHICH CATASTROPHE WILL THE GREEKS CHOOSE? The unresolved Greek Debt problem continues to hang over the European financial market. Over the weekend, Greek interior minister Nikos Voutsis told an Athens reporter that without further financial aid the country would default in June. Clearly, the three month long negotiations are finally getting to the jagged edge of the knife, which is weighing on the EURO. But without some sort of meaningful debt reduction or restructuring from the troika, what kind of choices are the Greek people really looking at? If the Syriza party sticks to its political mandate and refuses to cut wages, pensions and other entitlements, Greece will default on around €320 billion of private and institutional debt. Some economists estimate that it could take up to five years of more economic hardship for the Greek economy to recover and re-enter global capital markets. If Syriza caves in and agrees to reinstate all of the austerity measures outlined in the last troika agreement, that will be the end of Syriza as a political party. Greece will get additional funding from the IMF, which will just be returned to the IMF as repayments, and will continue to struggle with its leadership and its protracted downward economic spiral. Both results are catastrophic for Greece. The crisis has entered the point where the Greece people will have to acknowledge the difference between political reality and wishful thinking. Do they want to default; which would be like a five year sentence of hard labour, or do they want to accept the current agreement; which is like a life sentence with no possibility of parole? The technical picture in the EUR/USD has worsened as Friday's trade was an outside reversal day (the EUR/USD traded above the previous day's high and closed below the previous day's low) see chart. Synergy FX now looks for the next support level at 1.0860 to come into play. We suggest medium-term traders can look to add to short positions up to the 1.1060 area. The USD/JPY posted its highest close in two months over 121.50 on Friday. Synergy FX suggests looking for a pullback into the 120.80 area to add to long positions for a move back over the March high at 122.05 in the near-term. The AUD/USD posted a large outside reversal day on Friday and closed near the .7820 pivot point. We see the next key support area at .7775. Once that level is broken there's no meaningful chart support until .7640. With no first tier data expected this week, the Aussie will be driven by external flows. We see the .7865 level capping trade on the upside. The GBP/USD had its lowest close in two weeks on Friday. We suggest traders who sold at Friday's level

at 1.5575 can add to short positions up to 1.5480 and look for a break of 1.5455 to extend down to 1.5340. SYNERGY FX