EUR/USD holds below $1.20

The template from 2014 continues to hold in place as both the pound and euro continue to weaken against the US dollar.

Euro and US dollar notes
Source: Bloomberg

EUR/USD remains oversold

Once again Greece is the headline topic being discussed in Europe as the looming general election and the consequences of a less austere government gaining control looks ever more likely. Greece finds itself being the testing ground again. Any ability of a new government being able to renegotiate slightly more flexible terms to its bailout will be monitored.

At the current level of $1.1955, EUR/USD remains in oversold territory and is showing little sign of being able to mount a challenge to retest the 50-day moving average, sitting up around the $1.2330 region.

Today will see the release of numerous European countries' services PMIs, but of late the release of economic data has been more likely to harm rather than help any chance of strengthening the euro.

Spot FX EUR/USD chart

Eurozone issues weigh on UK recovery

Yesterday saw the launch of the Labour party’s push towards this year’s general election in the UK. The current coalition team of Conservatives and Liberal Democrats has offered a relatively stable platform for the UK recovery to progress.

European issues over Greece and the consequences of a leadership change have kept speculation high that the downturn in the eurozone’s recovery will continue to weigh on the UK. With the eurozone the UK’s largest trading partner it is not difficult to see why the perceived strength of the economy has been chipped away at over the last six to twelve months, as this cloud continues to hang over the country.

Spot FX GBP/USD chart

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