Serious progress has been made among Greek politicians in accepting the troika’s demands. In the US, Ben Bernanke refused to cheer the drop in the unemployment rate and found negative aspects to cling to.
Both events sent EUR/USD above the 1.3212 line and is now at the highest levels in 2012. It still has room until the next resistance level.
Greek Hope
After many long days of intense negotiations, reports coming out of Greece point to an agreement between the coalition’s politicians.
EUR USD Breaking Higher – Click to enlarge
Pressure from the EU / ECB / IMF troika mounted in recent days and patience was hard to find. Politicians had little choice, but they didn’t want to look too submissive in front of their voters. Elections are due in April.
Agreeing to new measures is a condition for receiving the second bailout and for signing the “voluntary†haircut by the banks (aka Public Sector Involvement, PSI).
It now seems that consensus is close in Athens, despite protests and strikes. A report about the debt-struck country is due on Thursday. Greece needs to secure the bailout before March 27th – more than 14 billions euros need to be paid back by March 20th, and Greece has a “grace†week.
Cold US Water
In an official testimony in Washington, Ben Bernanke said that the economic situation isn’t too good. His concerns regarding employment were seen when he talked about the 8.3% unemployment rate as not reflecting the real state of the job market.
Instead, he mentioned the employment-to-population ratio as a place for concern. Staying in unemployment too long means that people lose their skills and lose their attachment to the labor market.
EUR/USD moves
The pair was trading in range – between 1.3020 to 1.3212 for over a week. The recent news sent it above this level. Euro/dollar touched 1.3270 before sliding a bit lower, to 1.3245 at the time of writing.
Resistance appears at 1.3333, which was support back in November, when the pair traded at higher ground. More resistance is at 1.3450.
1.3212 now turns into support, with more minor support at 1.3145.
For more on the euro, see the EUR/USD forecast.
