With the Greek austerity plan voted on, the next focus will be the rubber stamping of the implimentation (tomorrow) and the EU/IMF funding on Sunday. There is little reason to expect any other outcome. The bond restructuring plan is another can of worms, however, with French Plans coming under more criticism of late. Let’s face it, the situation in Greece is complex with tentacles that extend out. As a result of the uncertainty, one would expect that the EURUSD would come under pressure. However, in order for that to come to fruition, the focus must remain on the hurdles in the EU that lie ahead. The fundamental influence that can reverse the bias would be if a credible solution is found (and/or the market believes it) and if things like the US debt extension has problems. Time is ticking for that so it can override the EU issues if it is allowed to happen.
The other thing known is that the risk is increased in these fluid times. As a result, moves like we saw in the EURUSD this morning on the back of 1 vote by a Greek parliamentary member when the EURUSD lost 100 pips in less than a minute, could be more frequent. Be aware. Be prepared. Watch the chart levels.
From a technical perspective, the pair tested a trendline on the hourly chart at the 1.4350 level (low since the vote was sealed) and will be the short term level I will be watching today for support. A break of that level should solicit additional selling with the 1.4327 low (was a key ceiling yesterday) being the next key level to eye. If the EURUSD is going to go lower, it must get through these two key levels. Otherwise, in the absence of a break the bias today will remain more supportive in the pair.
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