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EUR/USD is now trading in the middle of downtrend channel seen in the hourly chart. Both downtrend support and downtrend resistance began their formation at the end of the last week.

The new 8 month low of 1.3362 completed the formation of downtrend support, and the spike higher that followed stopped exactly at downtrend resistance which already formed.

It is important to that in the last time that the pair was trading in a clear channel two weeks ago, it was an uptrend channel that resulted in a break downwards. Will we see an upwards break this time?

EUR/USD Downtrend Channel = Click to enlarge

The news and rumors  surrounding  Greece continue to dominate the pair’s trading and have an influence on all currencies. There were talks about leveraging the EFSF bailout fund to over €2 trillion. There is some support for this idea and some rejection.

Another theme is a Greek default within 6 weeks. This was denied by many, but these denials could help in keeping some calm as preparations are made.

Today’s Ifo business climate figure in Germany was lower than last month, but higher than expected. Apart from the Greek drama / tragedy, there are quite a few events.

For all the events and technical lines, see the EUR/USD forecast.