EURUSD – Monday trading

The FED triggered a move to dollar strength on Thursday as the trade weighted dollar rose steadily after news that the FED hiked the discount rate.  This meant much of Friday was spent determining how much important to place on this unexpected move.  The EURUSD rached a low of 1.3444 but the dollar could not find the momentum to rise any further.  As the Greek debate continues the Euro seemed contained with limited losses possibly due to the strength of the European stock market and strong European PMI data from the manufacturing sector.  However the dollar too kept up in terms of the stock markets which did not hurt the recent improvement in risk appetite.  The pair closed higher at 1.3613 in comparison to the close of Thursday at 1.3527.

Once again focus has turned to Greece and the plan for moving forward which has lent some support to the Euro against the dollar.  Any type of bail out that comes out of the next few days still contains many risks for the Euro with EMU framework now being tested for durability.  With no significant market news coming for Monday it is likely that the Greek bail out will be the driving force behind market movements, at least for today.

The pair had been running upwards for most of last year however since December a massive correction has taken place with the pair moving steadily through several support levels indicating that the bull which was EURUSD has finally run its course.  The breaking of the 1.4220 support line signalled a downward move which is still continuing with a value of 1.3405 the next target on the EURUSD charts.  It seems unlikely that any rebound will make much difference with the single currency being sold off in droves.