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Eurobears Covered Friday’s Growth

Hourly

The dollar rate continued its rise against other key currencies on the American session. The euro/dollar rate fell to 1.1297. The fall in the rate was by 169 points, from a maximum of 1.1466.

On Monday the calendar was empty, so the eurobulls ran from the market on the back of rumors that a Greek default is unavoidable. As soon as the euro/dollar approached 1.15, the Greek saga once again became the focus of traders’ attentions.

Athens cannot yet come to an agreement with its international creditors and in June the Greeks must pay the IMF 1.5 billion euros, 300 million of which needs to be paid before 3rd June. From June-August they’ll need to pay back around 3 billion euros. Greece is hoping to complete a technical deal with its creditors when they meet on Tuesday in Brussels, aiming to achieve some sort of political approval at a summit on 21st-22nd May.

At 11:30 EET, the UK is publishing data for April consumer prices and at 12:00 EET the Eurozone will publish theirs. The Eurozone will also release a March trade balance report at 12:00 EET.

Taking into account that the trend has been passed on the daily, forecasts are leading me to believe there’ll be a fall for the euro to the 135th degree to 1.1260. The 45th degree and the LB will be the support today. I don’t see a growth higher than the LB happening.

Daily

On the daily graph it’s clear to see how on Monday the euro/dollar rate closed off Friday’s growth. On the hourly I ended up with a 1.1260 target, but on the daily it’s a little lower at 1.1240. If sellers are able to close the week around 1.1200 and below, it’ll be a signal to sell the euro and a bear takeover will form. So I’m expecting the euro/dollar to continue its downward correction to a growth from 1.0520 to 1.1466.

Weekly

The new candle is closing the previous by 50%. It only has to close at 1.12 and below for the eurobulls to give in to the bear takeover. If the downward movement on the hourly and daily continues, the 1.1070/50 zone (see daily graph) will be back at the center of attention.

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