EURUSD Continues to Weaken on Greek Debt Worries

Quote of the day:“A paranoid is someone who knows a little of what’s going on.” – William S. Burroughs

EURUSD – 1.4111 @06:50 GMT

Good morning. Downside remains under pressure as recent upside pullbacks were short-lived. European finance ministers are meeting today and tomorrow and current fears that Greece will be forced to restructure its debt are dragging the euro down towards $1.40 which is a key support level, followed by $1.39 lower – the 50% retrace value of this year’s full upleg from 1.2870 to 1.4940. On the weekly charts, former resistance is currently providing support around 1.400, while the daily charts are bearish and potential rallies will probably face resistance into near-term resistance zone at 1.4300/20 and 1.4450. Given the current market sentiment, it’s unlikely that we’ll see a strong move towards 1.44 in the coming days. Anyway, looking for selling opportunities on both upside pullbacks and a break below current session low at 1.4050 is probably the best thing to do. I remain bearish on EURUSD on short-term basis, as long as the pair doesn’t return above 1.45. Today’s important events in the Economic Calendar are the Euro-zone CPI at 10:00 GMT and Bernanke’s speech later today.

Trading strategy: looking to sell on potential pullback to 1.4230, initial stop at 1.4280 (0.5% risk), target open

Support: 1.4050, 1.4000 and 1.3900
Resistance: 1.4150, 1.4200, 1.4280/00, 1.4350/70
Market sentiment: long term – mixed, medium term – bullish, short term – bearish, intraday – bearish

EURUSD daily chart 5-16-2011
EURUSD daily chart 5-16-2011

About abwehra group

The Art&Science of Trading Gold
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