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EUR/USD: Will Greece Exit the euro?

 

The euro continued to move in a slight downtrend as concerns rose in the European Union regarding the possibility of Greece being forced to exit the eurozone. These fears escalated after the Greek government unexpectedly decided to bring forward the presidential election to this week, instead of February 2015. The failure to elect a new leader could threaten the entire European economy, and have long-lasting consequences.

 

Elsewhere, the US posted better than expected industrial production data, which added more demand for the dollar.

 

Here are the major Resistance (R) & Support (S) levels of the EUR/USD:

S2 1.2309

S1 1.2380

Pivot Point 1.2450

R1 1.2545

R2 1.2640

 
 

 
 

 
 

 
 
 

 
       

As for today’s figures, we’ll start with Germany, where the German Manufacturing Purchasing Managers’ Index (PMI) is scheduled for release. This figure measures the activity level of the purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; while a reading below 50 indicates a contraction in the sector. 

  • Forecast: 50.4 
  • Previous: 49.5 

A higher than expected reading is usually considered positive for the EUR, while a lower than expected reading should be taken as negative for the EUR.  

From the U.K., Mark Carney, governor of the Bank of England’s (BOE), is expected to speak today. As head of the BOE’s Monetary Policy Committee (MPC) which controls short term interest rates, Carney has a huge influence over sterling’s value. Traders observe his speaches for clues regarding future monetary policy. His comments may spark a short-term positive or negative trend.

The Consumer Price Index (CPI) will be released today; measuring the change in the price of goods and services from the perspective of the consumer. It’s usually used to measure changes in purchasing trends and inflation.

  • Forecast: 1.2% 
  • Previous: 1.3% 

A higher than expected reading tends to have a positive impact on the GBP, while a lower than expected reading is likely to reflect negatively.

Moving back to Germany, the German (ZEW) Economic Sentiment Index is scheduled for release; measuring the six-month economic outlook. A level above zero indicates optimism; while below zero indicates pessimism. 

  • Forecast: 20.8 
  • Previous: 11.5 

A higher than expected reading should be taken as positive for the EUR, while a lower than expected reading should be taken as negative for the EUR.

As for the U.S., the Building Permits announcement will be released; measuring the change in the number of new building permits issued by the government. Building permits are a key indicator of demand in the housing market.

  • Forecast: 1.060 M 
  • Previous: 1.080 M 

A higher than expected reading should be taken as positive for the USD, while a lower than expected reading should be taken as negative for the USD.

We wish you luck in your trading activities. For any further assistance, please do not hesitate to contact us at [email protected].    

Disclaimer The prices and news mentioned in this outlook are absolutely no guarantee of future market performance. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades. Engaging in CFDs or Spot FX carries a high risk to your capital. You should not engage in this form of investing unless you understand the nature of the Transaction you are entering into and the true extent of your exposure to the risk of loss. Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which the trade is based.

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