FX: EURUSD Extends the Low in Early NY Trading

The EURUSD has made new lows for the day in early NY trading at 1.4456. Worries about Greece and the implications from a default are increasing the bearish sentiment. S&P over the weekend said that the French Plan if enacted would be considered a “selective default” and therefore would cause an “event” for CDS market (Credit Default Swaps).  A default would also put the ECB in a bind with regard to using the debt of a default nation as collateral for loans to the struggling Greek banks.  Failure to be able to accept Greek debt would cause a collapse of the Greek banks.

 

 

Of course all is being done to avoid a default and getting to that point. The script has yet to be played out in its entirety. Stay tuned.

From a technical perspective, the next key target on the downside would be the 1.4446 level and below that the 1.4435 level.  The 1.4446 level is the 38.2% of the move up from the June 28th low and also the low from June 30th and near the highs from June 28th (see chart above). The 1.4435 level was the low from Friday’s trade (which was quickly rejected). 

On the topside of the hourly chart (see above) the price has been using the 100 hour MA (blue line) as a level to sell against. The price has tried to move above the MA level on a few occassions in the London session, but each time ran into sellers. The current level comes in at the 1.4492 level. The moving average level is flattening.