The single currency has found strength this week to get over 1.30 psychological level versus the greenback again as the markets have shrugged off the delay of reaching an agreement between Greece and its creditors from the private sector as they have done last week by ignoring downgrading the credit rating of 9 of the Euro area remembers and also the EFSF's bonds by S&P giving all of the EU countries a negative outlook driving the yield of the European bonds down further.
But The EU Fin Ministers meeting yesterday has come out yesterday with a new warning to Greece that it shouldn't expect more funds for bailing it even though the country's economy is worsening to push the single currency below 1.30 again.
The single currency has already opened the week below 1.29 versus the greenback on the worries about the results of the negotiations between Greece and IIF on the fear of the possibility of failing again to reach an agreement while its creditors' troika which consist of the EU, IMF and ECB has put this required agreement as a precondition before going on bailing out Greece while Greece is a head of meeting and new maturity of another 14.4b euros next 20th of March.
The market is also waiting now to have a stronger indication about the EU economic performance which is expected to get better later this year as the ECB president Draghi has referred recently fueling the single currency recent rebound with today release of EU PMI Manufacturing index preliminary reading which is expected to show an improvement to 47.5 in January from 46.9 in December and also the preliminary reading of Jan EU PMI Services index which is expected to be 49.1 from 48.8 in December.
God willing, in the case of getting over 1.3051 whereas the single currency has eased back again, it can meet another resistance at 1.3075 before 1.3196 and breaking it can open the way for meeting another resistance at 1.3546 while getting down again can face supporting levels now at 1.2874 which could contain the pair dovish opening this week and breaking it can be followed by meeting another resistance at 1.271 before 1.2631 whereas the pair could rebound to these current levels underpinned more successful EU bonds auctions thanks to the ECB efforts for lowering the cost of borrowing and the optimism which triggered week a week ago by the release of EU ZEW economic sentiment which got better in Jan strongly to -32.5 while the markets were waiting for -48.7 from -54.1 in December and also Germane ZEW economic sentiment which has improved too to -21.5 which the market was waiting for -49.1 from -53.8 in December showing strong elevating of the investors confidence.
Kind Regards
FX Market Strategist
Walid Salah El Din
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