Previous: EUR/USD Remains Within Range Ahead of Greek Re-election (6/15)
The Greek election results are most likely going to give the New Democracy party a majority. If not, a coalition government including the ND, Pasok(socialist), and the leftist Democracy party is likely, now that the Syriza party has conceded and refuses to join any coalition government.
The EUR/USD surges above previous week’s high near 1.2666, pushing above 1.27.
EUR/USD Daily Chart 6:40AM EDT 6/15/2012
EUR/USD is now trading around 1.2735 at 6:45PM EDT, extending the EUR/USD recovery. The market has been putting risk back on based on expectations that central banks will come to the rescue. The election also puts the pro-bailout party in charge of the parliament in Athens so this is no drama compared to if the Syriza party were to be victorious. The EUR/USD therefore has some upside to begin the week.
Looking at the daily chart, let’s examine some fibonacci projections based on our first leg of recovery from June 1 to June 11. The second leg started on June 12, projects to a wave equality at 1.2768.
Just above that at 1.2820, we have a resistance pivot from May 18 and 21.
Then as you project the 2nd leg of recovery to 161.8% expansion of the 1st, we approach the key level at 1.30. This was the support area since February until it was broken in May. This would also be near a declining trendline connect 3 resistance pivots since February.
The recovery in the euro is reflected by the latest COT report (latest update on 6/12) that the market has been covering euro-shorts from its record levels.
source: www.dailymarkets.com
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.
