Cyprus: Euro-Exit Spectre Sends EUR/USD Down

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The drama in Cyprus is very far from being over: the chairman of the parliamentary finance committee in Cyprus said that they “must asses the benefits of a euro exit“. EUR USD Down After Euro Exit comments by chairman of parliamentary committee in Cyprus March 25 2013

After the euro digested the Cypriot deal at around 1.30, EUR/USD is now down to 1.2940.

Update: So much for the Cyprus Deal – EUR/USD Tests Low Support

Chairman Nicholas Papadopoulos earlier told the Irish radio that a haircut of 30% could be imposed on large accounts according to what he has heard. There are no official nor final numbers yet.

The deal that was announced between Sunday and Monday left quite a few uncertainties. The biggest one is the size of the haircut that depositors in accounts of over 100K in Laiki would have to suffer.

Another uncertainty is the reaction of Russia: the bigger accounts in Cyprus are thought to be held by Russian investors. Russia has granted a loan to Cyprus and was involved in intense talks during the past week.

Support is found at 1.2880, followed by 1.2805. Resistance is at 1.30. The pair peaked at 1.3050 on the news, but quickly lost ground and struggled around 1.30.

For more levels, events and analysis, see the EURUSD forecast.

Analysis: How will the 11th hour Cyprus Bailout affect the Forex Markets?

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