EUR/USD below Uptrend Support

By TraderVox.com

Tradervox (Dublin) – The Euro/dollar cross started the week with a break of the uptrend support of 1.30. The election result in France and Greece has been unfavorable for the euro and it has found support on low support. The euro/US dollar downfall started on Sunday after the election results in France where Sarkozy was defeated; in Greece the New Democracy and PASOK parties which are the major proponents for austerity program in Greece have not gotten the 151 majority required to win an election and the coalition government in the country is unlikely.

The pair has dropped to 1.2970 at the time of writing this, where it started its decline at 1.3023 and it has not been able to regain the 1.3050 line or its uptrend support of 1.3065. The pair continued to decline and broke the psychologically important round number of 1.30. It found a bottom at 1.2955, which is close to support at 1.2945, which is the lowest since January. Analysts are warning that if the 1.2945 breaks; the pair will find its next support at 1.2873.

Apart from the French, Greece, and German local elections, the pair will also be affected by the Sentix Investor Confidence report which is expected to be released on Monday. The reading is expected to drop from -8.2 to -14.7 which show increased pessimism in the regions economy which is bad for the euro. Further, German Factory Orders, which are expected to rise to 0.5 percent from previous reading of 0.3 percent, is expected to have very little effect on the euro. Other reports from Germany include the German Industrial production which will be released on Tuesday and the German Trade Balance on Wednesday. The same reports from France will be released on Thursday and Wednesday respectively.

The ECB monthly bulletin which will be released on Thursday is also likely to affect the trend of the euro/dollar pair. The pair is expected to remain under pressure and it has a bearish outlook for the week.

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