Well it didn’t take long for us to see if the EURUSD would break below 1.3000 support this week. Friday’s selling pressure is continuing this morning with the EURUSD briefly trading below 1.3000 to a low of 1.29996. Currently though the pair has bounced back above the 1.3000 figure to 1.3010. The morning weakness comes as the overnight session was filled with talk of big buyers around 1.3050 which apparently were never there, or quickly backed off.
Place Your Bets
With 1.3000 cracking, the next question is where do we go from here?
Over the weekend, one of the popular ideas being thrown around by Forex traders was a possible breakdown to 1.2850 on 1.3000 support failing to hold. However, with the EURUSD quickly bouncing off of 1.3000, it is showing that we aren’t just yet seeing panic selling.
Looking ahead, the next move in the EURUSD may takes its cue from the European equity markets which are about to open this morning. After falling over 2.3% on Friday, the CAC and DAX indexes are again expected to open lower, with futures currently lower by about 0.6%. As such, Forex traders should keep their eyes on the open. If stocks bounce, it will indicate that we are at least seeing some short tewrm bargain hunting which could propel the EURUSD to further bounce off of the 1.3000 figure. Nonetheless, any upside could be limited to the 1.3070 level, last Friday’s close.
Soros Out Complaining About the EU’s Financial Crisis
Business Insider reported over the weekend on George Soros’s speech that he delivered to the new Economic Conference in Berlin. Overall, he isn’t a big fan of the deflationary measures EU’s Central Banks are taking and has issues with some of the treaties that were established for the EU’s creation.
The Maastricht Treaty was fundamentally flawed, demonstrating the fallibility of the authorities. Its main weakness was well known to its architects: it established a monetary union without a political union. The architects believed however, that when the need arose the political will could be generated to take the necessary steps towards a political union.
But the euro also had some other defects of which the architects were unaware and which are not fully understood even today. First of all it failed to take into account the fallibility of the architects: there is neither an enforcement mechanism nor an exit mechanism and member countries cannot resort to printing money. This put the weaker members into the position of a third world country that became over-indebted in a hard currency. Read more:
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