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EUR/USD - Higher, but Greek Uncertainty Continues

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by , 11-14-2012 at 06:50 AM (471 Views)
[COLOR=#444444][FONT=Arial][B]The [URL="http://www.forexcrunch.com/category/forex-weekly-outlook/eur-usd-outlook/"]EUR/USD[/URL] was up slightly from yesterday’s (Nov. 13) levels, but the uncertainty over aid for Greece continues to weigh on the markets. At a meeting in Brussels, European finance ministers and the IMF failed to reach an agreement on Greece’s debt, which is needed in order for Greece to receive more bailout funds. This, despite the fact that Athens managed to pass a deeply unpopular austerity budget. With the country expected to run out of funds in a matter of days, pressure is growing on Greece and its lenders to reach an agreement, and further uncertainty will continue to weigh on the euro. In today’s economic news, Euro-zone Industrial Production fell 2.5%, its sharpest drop since March 2009. Italy posted some good news as the yield on 10-year bonds dropped. In the US, the highlights are Retail Sales and PPI.[/B][/FONT][/COLOR]
[COLOR=#444444][FONT=Arial] [/FONT][/COLOR]
[COLOR=#444444][FONT=Arial][B]EUR/USD Technical[/B][/FONT][/COLOR]

[LIST][*]Asian session: Euro/dollar edged upwards, and consolidated around 1.2725. The pair is slightly higher in the European session.[*]Current range: 1.2690 to 1.2750.[/LIST]
[COLOR=#444444][FONT=Arial]Further levels in both directions: [/FONT][/COLOR]

[LIST][*]Below: 1.2690, 1.2624, 1.2590, 1.25, 1.2440, 1.2390, 1.2250, 1.2140 and 1.2042.[*]Above: 1.2750, 1.28, 1.2880, 1.2960, 1.30, 1.3030, 1.3080, 1.3140, and 1.3170.
[*=left][B]1.2690 is back in a support role as the pair has strengthened.[/B][*][B]1.2750 is the next line on the upside.[/B][/LIST]
[COLOR=#444444][FONT=Arial]Euro/dollar higher despite Greek concerns – click on the graph to enlarge.[/FONT][/COLOR]
[COLOR=#444444][FONT=Arial][B]EUR/USD Fundamentals[/B][/FONT][/COLOR]

[LIST][*]7:45 French CPI. Exp. +0.2%. Actual +0.2%.[*]10:00 Euro-zone Industrial Production. Exp. -1.6%. Actual -2.5%.[*]10:26 Italian 10-year Bond Auction. Actual 4.81%..[*][B]13:30 US Core Retail Sales. Exp. +0.2%.[/B][*][B]13:30. US PPI. Exp. +0.2%.[/B][*][B]13:30 US Retail Sales. Exp. -0.2%.[/B][*]13:30 US Core PPI. Exp. +0.1%.[*]15:00 US Business Inventories. Exp. +0.5%.[*][B]19:00 US FOMC Meeting Minutes.[/B][/LIST]
[COLOR=#444444][FONT=Arial]For more events and lines, see the [I][URL="http://www.forexcrunch.com/category/forex-weekly-outlook/eur-usd-outlook/"]Euro to dollar forecast[/URL][/I][/FONT][/COLOR]
[COLOR=#444444][FONT=Arial][B]EUR/USD Sentiment[/B][/FONT][/COLOR]

[LIST][*][B]Greek bailout saga continues: [/B]European finance ministers and the IMF met in Brussels on Monday, but failed to reach an agreement on Greece’s long-term debt. Without a deal, no further funds can be released to Greece under the bailout agreement. The finance ministers agreed to give Greece a two-year extension, until 2016, to reduce its deficit to 2% of GDP. The EuroGroup also decided to postpone a decision on the next tranche of aid until November 20. Greece has warned that it will run out of funds by November 16,so it’s not a pretty situation. The rumor mill is in full gear, with a report in the German newspaper Bild that Greece could receive one lump sum payment of some 44 billion euros. This would certainly ease the situation in Greece and bolster the euro as well.[*][B]Greek parliament approves budget: [/B]The Greek parliament voted Sunday to approve the government’s 2013 budget. The budget contains harsh austerity measures required for Greece to receive the next tranche of aid under the bailout package. The close vote (167-128) underscores the deep opposition to the budget, which raises taxes and the retirement age, and reduces the salaries of many public workers. Despite the vote, the troika is still unwilling to release more funds, which could complicate things for the already beleaguered Greek government.[*][B]Euro under pressure[/B]: Recent developments have not been kind to the European currency, which has been hit by the triple whammy of the Greek crisis, weak Euro-zone data (particularly in Germany) and the US fiscal cliff crisis. [URL="http://www.forexcrunch.com/eur-selling-mentality-expected-to-remain/"]Greece is still waiting for more funds, as the EuroGroup and IMF continue to delay making a decision. The fiscal crisis in the US is hurting market sentiment, and the crisis in Spain hasn’t improved, although it hasn’t been dominating the headlines lately[/URL]. The euro has been flirting with the psychological 1.27 level, and if the Greek situation spins out of control. we’re likely to see the currency take a tumble against the dollar.[*][B]Fiscal cliff crisis looming in US[/B]: The so-called fiscal cliff could occur at the end of the year, [URL="http://www.forexcrunch.com/concern-over-germany-has-trumped-the-positive-outcome-in-greece/"]when tax breaks are set to expire at the same time that government spending cuts are scheduled to take place[/URL]. Congress and President Obama will have to reach some compromise, otherwise the US could be hit with a recession in 2013. [URL="http://www.forexcrunch.com/all-you-need-to-know-about-the-fiscal-cliff/"]There are three choices that lawmakers can deal with the fiscal cliff, none of which are particularly palatable[/URL]. We can expect some tough, protracted negotiations between the Republicans and Democrats, as lawmakers scramble to reach a compromise and find a solution to the crisis.[/LIST]
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