EUR/USD- Can Germany approve an anther bailout for Greece
Chancellor Angela Merkel who is fighting for a third term is facing an extremely challenging situation during her campaign. One thing is certain that German people are not agreeing to keep providing the support for Greece. Bernit Coure , the ECB’s board member, has confirmed earlier this week that Greece could need another two more bailout payment to keep the country float. Regardless of who wins the election in Germany, approving of another bailout package for Greece could be tremendously problematic.
Political uncertainty in Italy is increasing the Bond yield which is of concern for Euro
The political saga continues for the northern Europe, the Italian senate commission yesterday delayed their decision for expelling the ex prime minister Silvio Berlusconi from the parliament because of the mounting pressure by his allies, who are threatening to bring down the parliament, if such action takes place. This political uncertainty has certainly affected the Italian bond yield which is above the 4.5% and also above the Spanish borrowing cost for the first time during the past 18 months. Worse than expected, the GDP number for the Q2 released yesterday for the country, is a further evidence that this political turmoil is not certainly going to help the country and the politicians certainly need to sit down and think more carefully about the future of the country.
How “accommodating” is the ECB’s monetary policy
The ECB’s president Mario Draghi, who is speaking later this afternoon will face his defies when he will try to persuade the markets once again about the recent improvement in the economic activities in certain parts of the Eurozone.
EUR/USD- Bullish pattern complete
Focus: The pair need to break the 1.3367-1.3401 resistance zone to confirm the uptrend. The immediate term support zone could be near the 1.31-82-1.3161 zone.
The EUR/USD pair has broken out of an ascending triangle pattern to the upside on a 30 minute time frame. The price has almost completed its projection (shown by yellow rectangle) to the upside before retracing back. The pair is trading below the 50 day (shown in green),but below the 100 day (shown in yellow) moving average which confirms that the bulls are losing their control. Moreover, the EUR/USD pair has also broken the upward trend line which further endorses the above argument.
The RSI is near the oversold zone which means that the bias could be to the upside.