Back to the Drawing Board for the Eurogroup and EUR/USD

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An all night session of the Eurogroup with the IMF resulted in scheduling another session for Monday, November 26th, as the sides weren’t able to agree on means to lower Greece’s debt, as well as the long term goals.

EUR/USD, that had a success already priced in, dropped like a rock.

The IMF continues insisting that without a debt reduction for Greece, its debt remains unsustainable. The IMF could even leave Greece and the troika. At this point, it means that euro-zone governments will have to accept losses on money lent to Greece, and this isn’t Merkel’s game plan. These were meant to be loans, that would even yield a profit, not a loss of German taxpayers.

The ministers of the Eurogroup want to settle for easier terms such a lower interest rate on loans to Greece, and a delay in reaching the goals: 120% debt to GDP in 2022 rather than 2020.

No magic solution was found during the long night. When the meeting ended, EUR/USD plunged from the highs of 1.2821 to 1.2836 before stabilizing on lower ground.

EUR USD Down After Failed Eurogroup November 21 2012

EUR USD Down After Failed Eurogroup – Click image to enlarge

1.2750 serves as weak support, followed by 1.2690. 1.28 is weak resistance, with 1.2880 sitting in the distance.

For more, see the EUR/USD forecast.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.