February 21st, 11:28 am by Barbara Zigah
(eToro Blog) In the early hours of Tuesday morning, the Eurozone’s finance ministers and policymakers approved the second Greek bailout loan which will provide the debt-laden country with the €130 billion necessary to satisfy maturing debt obligations. On the actual news rather than the rumor of it, the Euro rallied higher against the U.S. Dollar, trading at one point at 1.3293 before retreating, unable to break through resistance at 1.3300. Several of the OpenBook gurus were able to take advantage of the brief rally; guru MPL1983 closed out a long as the pair hit 1.3271, booking a profit of 7.75% while trader noe017 closed out a short for a 13% gain.
Trader redcotoro closed a very profitable string of EUR/USD positions both before and after the announcement; this trader closed 28 positions over the past 24-hours, with an average return of 23.55%.
Meanwhile guru Gavinwright closed out several longs which returned an average 7% and is holding onto two profitable longs, one of which is showing a 60% return. Guru waleed0987 is also sitting on four open longs, all of which are showing a gain, ranging from 7.90% to 13.27%. On the OpenBook, with the EUR/USD trading at 1.3270, it would appear that the majority of traders presume the rally is over as sentiment is decidedly bearish.
Analysts agree that the second loan is still nothing more than a band-aid, as the underlying problems of crippling debt and a dismal growth outlook can not revive the Greek economy. The troika was compelled to give Greece extra relief in order to meet the official 2020 debt target; nonetheless, Greece’s estimated debt at that point will still be close to 121% of its GDP. It will be incumbent upon Greece to follow through on the promised reforms and savings, otherwise that debt to GDP ratio will surge closer to 160%. Many believe that the rescue page only delayed the inevitable and that Greece will ultimately have no option but to secede from the Eurozone.
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