Friday, February 10, 2012

Today we saw a 135 pip fall in the EUR/USD currency pair due to concerns coming out of Europe over the Greek austerity plan. There was a brief opportunity to position yourself short near a known resistance level for a ~123 pip trade. In today's technical analysis video, we will identify trade entries around support & resistance levels.

Friday, February 10, 2012

On yesterday, we heard news that the Greek coalition had finally reached a deal on the 130 billion euro bailout package for Greece and this provided confidence to the market in the short term. However, the lack of details in the agreement, along with growing rumours of opposition among EU leaders, has led to the fall in price that we are seeing in the EUR/USD pair for today. EU Finance Ministers are demanding more cuts from Greece, but too much austerity will lead to more social unrest for the people in Greece, who are already suffering. So, some analysts believe that the only route left for Greece is to completely leave the Eurozone, re-adopt the Drachma, and go through the intended default in March. Since there is still uncertainty over whether the Greek Parliament will approve the austerity measures, this has caused investor sentiment to shift towards more safety or risk aversion and we are now seeing euro weakness across multiple crosses.