Euro dollar started the week on higher ground on high expectations for a deal in Greece. In recent days, there were too many signs that Germany and the US are pushing Greece to declare bankruptcy (details inside). The first step is another delay today, by finding another excuse to take the time. Greece has approved more cuts during the weekend. All eyes are on Brussels today. A deal is priced in. How hard will the euro fall if no deal is reached? Here’s an update on technicals, fundamentals and what’s going on in the markets. EUR/USD Technicals Asian session: A very active session saw a gap higher and a temporary rise above 1.3212, that was erased later on. Current range: 1.3145 to 1.3212. Further levels in both directions: Below: 1.3145, 1.3060, 1.3060, 1.2945, 1.2873, 1.2760, 1.2660 and 1.2620. Above: 1.3212, 1.3280, 1.3333 and 1.3450. 1.2945 is the next support line. 1.30 is only a battle line. 1.3212 proved to be the decisive point that started the fall. Euro/Dollar on Greek decision day – click on the graph to enlarge. EUR/USD Fundamentals 14:30 European finance ministers meeting to decide on Greece. Update: Michael Derks sees a bridge loan as the preferred scenario for today’s meeting. For more events later in the week, see the Euro to dollar forecast EUR/USD Sentiment – Details of hurdles Deal or no deal?: Greece found 325 million euros of cuts required to fill the gap. Yet this may not be enough. A “secret troika report” is already known to show that even under the optimistic projections, the target of a Greek debt to GDP ratio of 120% in 2020 will not be reached. The size of the bailout could rise beyond 130 billion euros. Greek Prime Minister Papademos rushed to Brussels to try to close the deal. Part of the deal is PSI: An agreement already reached by Greece and its private bondholders to cut around 70% of debt. Remember that part of Greece’s debt is not held by the private sector but by the “official sector” – the IMF and the ECB. Escrow account: The level of mistrust in Greece is huge. One of the ideas gaining traction is that the bailout money will be deposited in a separate account that will be used only to service debt – without access for other government expenditure by the Greek government. A more far reaching idea is that also Greek taxpayer money will flow into this account, all for the sake of servicing debt. This means that Greece will find itself unable to pay government workers with taxpayer money as its money will go to pay its debt. This is another idea that takes sovereignty away and could push Greece to the corner. Signs of delay: Apart from ironing out the “last details”, Finland said that the bailout will likely be approved on March 12th. This is very far out. Greece must pay back 14.5 billion euros of bonds on March 20th, +7 days of grace, making it March 27th. This timetable, including the PSI, seems impossible. Smaller IMF Contribution: The International Monetary Fund, which is massive funding from the US, is expected to provide a much smaller contribution to the second bailout. This means that EU countries will have to contribute more. Together with the bigger sum, parliament approvals, and the tight timetable, this seems close to impossible. Plan B turning to Plan A: There are reports about plans made in Germany and the US for a Greek bankruptcy on March 23rd, when Athens will raise a white flag and a bank holiday will be announced. Here are 5 more ominous signs that Greece is pushed to the corner. ECB prepares: The European Central Bank swapped Greek bonds to ones that will not “participate” in a haircut – avoiding the Collective Action Clauses”. This seemed like a preparation for the PSI and a step forward. The ECB might help Greece by distributing profits as. Mario Draghi hinted and opened the door to a contribution by the ECB to the Greek bailout. This could also be a preparation for Plan B: A Greek bankruptcy. Portugal awaits Greece: Portuguese yields remain on high ground. The path chosen for Greece will likely be followed by the small Iberian country in the infamous “contagion” effect that is feared. More Positive US figures: Yet again, US jobless claims dropped to lower pre-crisis levels. The housing sector is more sensitive. Also the forward looking Philly index exceeded expectations, although its employment component was weaker than last month. The general picture of gradual improvement continue. This week doesn’t feature too many US figures. 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. Yohay's Google Profile View All Post By Yohay Elam Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. EUR/USD Daily share Read Next EUR/USD Bounces Off Resistance as Doubts About Greek Deal Yohay Elam 10 years Euro dollar started the week on higher ground on high expectations for a deal in Greece. In recent days, there were too many signs that Germany and the US are pushing Greece to declare bankruptcy (details inside). The first step is another delay today, by finding another excuse to take the time. Greece has approved more cuts during the weekend. All eyes are on Brussels today. A deal is priced in. How hard will the euro fall if no deal is reached? Here's an update on technicals, fundamentals and what's going on in the markets. 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