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Euro/dollar is now making a move higher above the double-top that it reached twice this week.  The move is not confirmed yet.The background for this move is the apparent cancellation of the plans to hold a referendum in Greece.  

EU leaders are still very cautious regarding Greece, and  uncertainty regarding the moves of Greek politicians remains high, the markets are moving.

Greece’s Prime Minister Papandreou got support from the people and got support from the main opposition party for the bailout programs they resisted so badly. The idea of the referendum rocked international markets but improved the strength of Papandreou in Greece.

EUR/USD is now at 1.3950, above fierce resistance at 1.3838. This was a double top during this week, and also was a swing low in the past. 1.39 is minor resistance above, followed by 1.3950 which is stronger. Support under 1.3838 is at 1.38, 1.3725 (both minor) and stronger support at 1.3650.

For more on the euro, see the EUR/USD forecast.

The move higher comes despite a relatively unexpected rate cut in the euro-zone. Mario Draghi decided to cut the rate to 1.25%, reversing the rate hike made by Trichet in July. This weakened the euro, but the events in Greece are much more powerful.

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