EURUSD: Euro heavy after Germany rejects Greek loan proposal by FX Charts

The Euro has ended the day a little lower as the headlines over whether Greece will or will not receive further funding from the EU continued to dominate trade. This looks likely to be the theme again both today and probably over the weekend as well, and thus, another similarly choppy session could lie in store, with direction depending on the conflicting headlines that we are bound to see. Germany’s rejection of Greece’s extension proposal will not help the Euro heading into the weekend, and it is a Greek holiday on Monday at which nationalist tendencies are likely to come to the fore, so I think I would rather be short the Euro than long over the w/e. A low of 1.1355 was  seen today, and this is again coming under pressure in late NY trade at the time of writing.Elsewhere today, the main economic focus will be on the flash EU &US Manufacturing PMI’s which are unlikely to do a great deal to assist the Euro. The EU Services/ Composite PMI’s will also be due.

Technically there is currently not much change from yesterday

On the downside, the Euro is at present sitting close  by the 200 HMA at 1.1365, ahead of the session low of 1.1355, below which would see further bids at yesterday’s low at 1.1330. Below there will again most likely see some more action around the recent 1.1300 pivot, ahead of the support in the 1.1270/80 area which is closely backed up by the Fibo support at 1.1260 (61.8% of 1.1097/1.1533). Under there would see further bids at 1.1220 and 1.1200, below which would see a run towards the trend lows (1.1097).

On the topside, 1.1400 will again most likely act as a pivot, but if we head above here in the unlikely event of some sort of agreement between Greece and the EU, then the Euro could potentially squeeze on towards the session high of 1.1449, where we now have a minor double top with Wednesday’s high. The Fibo resistance at 1.1437 (23.6% of 1.2570/1.1097) sill seems to be a hurdle but if the Euro can make a sustained run above it, then beyond 1.1450, we could head towards the daily Kijun (1.1470), the Feb 7 high of 1.1485 and possibly on to 1.1500.  If we were to see a move beyond 1.1500, then we would get a run towards the 3 Feb peak at 1.1533. Above there would see further sellers at the nearby Fibo resistance at 1.1542 (76.4% of 1.1679/1.1097), which would set up a run up towards 1.1600 (daily Kijun) and on to 1.1655 (38.2% of 1.2569/1.1097). If seen, such a rally could be seen as a potential sell opportunity, with a SL left on all short positions to be left above the 21 Jan high of 1.1680.

With the short term indicators being pretty flat, look for a rather lacklustre day, but possibly with a mild downside bias, heading into the weekend, but with political headlines always likely to cause a spike, so caution is warranted.

Economic data highlights will include:

EU Flash Manufacturing/ Services/Composite PMI’s, US Flash Manufacturing PMI.