EUR/USD starts the week with a fall from highs as the deadline for Greece is getting close and tough decisions cannot be avoided for too long. News over the weekend weigh on the common currency. Where will it go on this day of light volume? Here’s a quick update on technicals, fundamentals and what’s going on in the markets.
EUR/USD Technicals
- Asian session: The pair slid from highs and dropped below the 1.4282 line in a rather active session..
- Current range 1.4160 – 1.4282.
- Further levels in both directions: Below 1.4160, 1.4030, 1.3950, 1.3860, 1.3760, 1.3570, 1.3440.
- Above: 1.4282, 1.4375, 1.4450, 1.4580, 1.4650,
- 1.4030 was overridden several times now. But the first, initial dip, could be a warm up for the real thing at the end of the week.
- 1.4282 proved to be a strong line once again.
Euro/Dollar falling from highs – click on the graph to enlarge.
EUR/USD Fundamentals
- No events today.
For more events later in the week, see the EUR/USD forecast
EUR/USD Sentiment
- Sarkozi supports restructuring: The French president surprised by backing some kind of burden sharing. France has opposed it so far. His finance minister, the leading candidate for the IMF, rejects it.
- Rehn warns that Greece won’t get paid: The EU Commissioner joins other senior speakers such as Juncker and the Dutch finance minister in threatening that Greece won’t get the next tranche, due on June 29th – the deadline is getting close.
- Greek Austerity stuck: . There are talks about mass privatization to avoid Greek restructuring. But on the other hand, protests are mounting in Greece against it. Germany’s Der Spiegel reported that Greece failed to meet its goals. This was later denied, but everybody knows that Greece didn’t make it. They’re moving. It is clear that Greece will default.
- Weak US: Growth was weak in Q1, only 1.8%, according to the second release as well. Also jobless claims refuse to fall.
- Spanish protests and yields calm: Protests are still active in the main squares of Spanish cities, but there is no new development after the regional elections. These elections were a blow to the ruling socialists. The new authorities might reveal a huge pile of hidden debt. Spanish yields on 10 year remain stable at 5.35% – significantly lower than the peaks last week, but now on the rise.
FXCM Speculative Sentiment Index shows larger gains for the euro: 58% are short, the same as beforehand. According to this contrarian index, this shows continued gains for EUR/USD.
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