16 Jul 2015
EUR/USD: Bears in control despite Greece bailout vote approval
FXStreet (Bali) - EUR/USD has seen a modest uptick following the approval of the Greek bailout package by Parliament, with the 'Yes' reaching the 151 threshold, resulting on a high of 1.0965 so far, with offers still expected ahead of 1.10.
'Grexit' risk temporarily removed, ECB vs Fed divergence back in focus
Despite the 'Yes' vote, Greek Prime Minister Alexis Tsirpas is under growing pressure, with 39 of his MPs not supporting the austerity measures. Going forward, a reshuffle of the government, there has been talk of Mr. Tsipras stepping down, may be an outcome one could expect. However, as things stand, the deal should facilitate a near-term access to new funds by Greece, which may ease the drama, if only temporarily. As per EUR/USD trading, the near-term 'Grexit' risk being out of the way should allow traders to re-focus on diverging monetary policy divergences between the ECB and the Fed (Yellen sounded a bit more hawkish in her testimony on Wed).
EUR/USD technicals: Break below 1.10 a bearish development
Valeria Bednarik, Chief Analyst at FXStreet, notes: "The pair managed to bounce from the mentioned daily low before the US close, but maintains the bearish bias, as the 1 hour chart shows that the price is limited to the upside by former lows in the 1.0950/60 region, whilst the 20 SMA has extended its decline and now offers an intraday dynamic resistance in the 1.0990 region, whilst the technical indicators have reached oversold readings before stabilizing."
"In the 4 hours chart, the 20 SMA turned sharply lower above the current level, whilst the RSI indicator continues heading south around 38, supporting additional declines on a break below 1.0920, last week low and the immediate support", Valeria adds.
'Grexit' risk temporarily removed, ECB vs Fed divergence back in focus
Despite the 'Yes' vote, Greek Prime Minister Alexis Tsirpas is under growing pressure, with 39 of his MPs not supporting the austerity measures. Going forward, a reshuffle of the government, there has been talk of Mr. Tsipras stepping down, may be an outcome one could expect. However, as things stand, the deal should facilitate a near-term access to new funds by Greece, which may ease the drama, if only temporarily. As per EUR/USD trading, the near-term 'Grexit' risk being out of the way should allow traders to re-focus on diverging monetary policy divergences between the ECB and the Fed (Yellen sounded a bit more hawkish in her testimony on Wed).
EUR/USD technicals: Break below 1.10 a bearish development
Valeria Bednarik, Chief Analyst at FXStreet, notes: "The pair managed to bounce from the mentioned daily low before the US close, but maintains the bearish bias, as the 1 hour chart shows that the price is limited to the upside by former lows in the 1.0950/60 region, whilst the 20 SMA has extended its decline and now offers an intraday dynamic resistance in the 1.0990 region, whilst the technical indicators have reached oversold readings before stabilizing."
"In the 4 hours chart, the 20 SMA turned sharply lower above the current level, whilst the RSI indicator continues heading south around 38, supporting additional declines on a break below 1.0920, last week low and the immediate support", Valeria adds.