EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.75% against the USD and closed at 1.3116, after a news report stated that an Institute of International Finance has warned that Greek default could do €1 trillion ($1.3 trillion) of damage to the Euro-zone. It further added that a Greek default would likely force Italy and Spain to seek aid.
EUR extended losses as risk aversion increased amid uncertainty regarding the level of participation in a Greek debt swap deal. Earlier in the day, Greek Finance Minister, Evangelos Venizelos strongly urged private sector creditors to take part in the debt swap deal and warned that it was the best offer they would receive. However, reports suggest that only 20% of Greek’s private bond holders have agreed to the bond swap settlement criteria.
Adding to the bearish sentiment, on a sequential basis, Gross Domestic Product (GDP) in the Euro-zone fell 0.3% in the fourth quarter of 2011, marking the first decline since the second quarter of 2009.
In the Asian session, at GMT0400, the pair is trading at 1.3136, with the EUR trading 0.15% higher from yesterday’s close.
The pair is expected to find support at 1.3089, and a fall through could take it to the next support level of 1.3042. The pair is expected to find its first resistance at 1.3197, and a rise through could take it to the next resistance level of 1.3259.
Trading trends in the pair today are expected to be determined by the release of German Factory Order.
The currency pair is trading between its 20 Hr and 50 Hr moving averages.
