By TraderVox.com
Tradervox (Dublin) – The EUR/USD pair continued to ride higher on the bullish wave that was generated during the closing hours of the Friday’s trade. The pair opened the week at 1.2778 levels. The bullish bias from Friday’s close drove the pair up to the 1.28098 where the reality began to set into the Euro bulls.
The Friday bullishness in the EUR/USD was due to the positive market sentiments ahead of the weekend G8 summit at Camp David. In fact the summit lived up to its bullishness with the G8 leaders agreeing on popular “growth & jobs” plan instead of the “ forced austerity” measures which had led to toppling of previous governments in France and Greece. This is a positive sign of greater understanding among Euro zone members. In addition the French President has called for a Euro zone bonds which will be put to the table at the Euro zone meeting this week in Brussels. The Euro zone members have unanimously expressed support to keep the Greece within the euro zone. This was a relief to the Euro bulls who were struggling to get out of the Greek Exit Dilemma which was making the rounds last week.
But the Euro could not sustain the bullish bias for long. The Euro revered the course and turned bearish at 1.2808 levels, which served as a strong resistance. Following this was a huge selling rally in the EUR/USD driving the pair to find support at 1.2738.
The reasons for the sell off can be attributed to the fact that markets have not yet left behind the Greek saga which drags into more uncertainty as the elections come closer. Another supporter of the Euro bears was Spain. The Spanish Finance Minister said that the economy had continued to contract in the second quarter. This comes after Friday’s news where the government suggested the country would miss its budget deficit targets this year.
However the effect of the news was not reflected much in the European Bourses with all of them, with the exception of Greece and Spain, closing in the Green.
The EUR/USD has entered a tight trading range and will likely remain flat for the Asian session.
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