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Euro eyes Greek debt
The EUR/USD has consolidated in the $1.1310 region, and the market is keeping an eye on Greece’s attempt to reduce the level of its outstanding debt. The Syriza party hasn’t wasted any time since gaining power, and the new Greek finance minister Yanis Varoufakis is hoping to meet with EU finance ministers to try and restructure Greece’s debt. Mr Varoufakis wants to circumnavigate the troika, and talk directly with European finance ministers as he doesn’t want to talk to ‘technocrats’. The market is afraid that Greece will demand excessive relief on its debt or, even worse, threaten to default, and that is why EUR/USD’s downward trend will remain intact.
The US will reveal its ISM manufacturing report at 3pm today (London time). The market is anticipating a reading of 54.9 in January, which compares with the December reading of 55.5. The EUR/USD pair will receive short-term buying should the report miss expectations.
The downside bias for EUR/USD remains in place, but it has been trading within a tight range recently. The 200-hour moving average of $1.1360 is acting as resistance and, should this level hold, $1.1280 will be the target and the next level of support will be $1.1240. To the upside, a move through $1.1360 will bring $1.14 into play.