EUR/USD Loses Support on Greek, Spanish and Irish Worries

EUR/USD not only lost its channel, but proceeded lower lost support, as bad news from Greece, Spain and Ireland flows quickly. Quick update on 7 developments and their impact.

Recent updates about Greece:

1. We will not know if Greece complied or not: There are reports that the EU / IMF delegation will suspend its checkup. During the week, the Germans said that more time was needed.
2. ECB Continues uses its strong vigilance to reject any kind of Greek restructuring. It’s alone now, but fighting fiercely. Every ECB speaker that reached a microphone continued resisting this option.
3. Norway walks away from Greek aid: The oil rich country which is not a member of the EU, has no obligations and makes it clear that it will not help Greece.
4. Fitch downgrades Greece: Not surprising, but this moves adds to the downfall.
5. Spanish protests near a showdown: The main squares of around 20 cities are full with people protesting against all parties and against the banks. No protests are allowed on Saturday and on Sunday, when local and regional elections are held. There are intense debates in the supreme court about this, as protesters plan to remain in the squares and make a “silent shout”, at 23:00 GMT (midnight local time).
6. Spanish yields post sharp rise: Yields on 10 year notes are on the rise again, approaching 5.50% – a dangerous line.
7. Ireland in trouble: IMF says that Ireland may stay away from the markets for a long time.

Euro/Dollar now trades at 1.4145, under support at 1.4160. It lost the uptrend channel that characterized it at the beginning of the week.  Further support is at 1.4030. Resistance is at 1.4282. For more levels, see the EUR/USD forecast.