By: Christopher Lewis
EUR/USD moved very little during the session on Wednesday as the pair continues to reflect the general attitude of the markets in all things Greece related. The Greeks managed a deal with the Troika to lower the debt and get a bailout, but the markets hardly seem impressed. The knee-jerk reaction has held – but we haven’t been able to build upon that.
The pair is still going to be held hostage to headlines, and there are even many reports about market chatter involving the possibility of a default going forward. So, in some kind of way, the market is where it was weeks ago – still waiting to see what comes next.
The Greek bailout simply papered over the cracks in the European Union. The problems are simply far too complex to believe that the fund being sent to Athens is going to change things for the long run. Essentially, the politicians avoided a meltdown in early March, but they have done very little to fix the issues at hand, and I believe the reaction of the EUR/USD pair to be a statement of the market thinking exactly that.
1.3250 Still Looms
The 1.3250 area has been pierced several times now, but continues to hold firm as resistance. The area also has the 100 day EMA and the 38.2% Fibonacci retracement hanging about as well. The level is in my opinion, the start of a lot of resistance going all the way up to the 1.35 level. I know that the Euro can continue to rise, but I believe the path of least resistance is to the down side at this point. It must be said however, there is always someone willing to come in and try to push this pair up though.
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The movement on Wednesday wasn’t much to think about, and gave us little in the way of a decision. However, the area is a great place to look for weak candles such as shooting stars and bearish engulfing ones on lower time frames as this pair looks like it may continue to consolidate down to the 1.30 level.