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EUR/USD Loses Important Support on Greek Mess

The trouble in Greece gets worse after the call for a Greek referendum. The internal political mess and very loud criticism now sends EUR/USD below the 1.3650 support line.

Here’s a quick roundup of the major events:

  • Another PASOK (ruling party) member quits the party.
  • 6 ruling party MPs call for the Prime Minister to resign.
  • French president Sarkozy is disappointed from the  referendum  idea.
  • German politicians are very frustrated.
  • Fitch releases a statement saying the  referendum  is a threat to the euro-zone.
  • This move is regarded by many as a vote on Greece’s euro-zone or even the European Union membership.
  • Bank stocks are crashing in European stock markets.
  • Italy, which has troubles of its own, sees its bond yields leap to 6.32%, the levels seen in August, before the ECB stepped in. Now this happens as the ECB is active in the markets.

It seemed quite clear that the progress made in the EU Summit wasn’t sufficient, but nobody expected that Greece would shoot itself in the leg.

EUR/USD is now at 1.3613, a three week low, after losing support at 1.3650. The next line is only 1.3550, followed closely by 1.35 and 1.3450. Above 1.3650, resistance is at 1.3725.

For more on the euro, see the EUR/USD forecast.

Yohay Elam

Yohay Elam

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 a 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.