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EUR/USD recovery falters, back to square one


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FXStreet (Córdoba) – EUR/USD recovered from a fresh 29-month low scored earlier, as anxiety over snap elections in Greece put the shared currency under renewed pressure.

EUR/USD fell to its lowest level since August 2012 at 1.2123 before staging a mild bounce. However, the upside was capped by the 100-hour SMA at 1.2185, leaving EUR/USD little changed at the 1.2150 zone.

EUR/USD levels to watch


As for technical levels, EUR/USD could find immediate supports at 1.2123 (2014 low Dec 30), 1.2118 (Jul 26 2012 low) and 1.2100 (psychological level). On the other hand, resistances are seen at 1.2185 (100-hour SMA/daily high), 1.2220 (Dec 29 high) and 1.2245 (Dec 23 high).


Greece’s political uncertainty


On Monday, Greek government failed to secure majority in the Parliament to elect a president, leading to early general elections. The markets are concerned that the leftist Syriza party, opposed to bailout and austerity measures, may win the election.


“This uncertainty will certainly damage the Euro, as ‘grexit’ chatter increases and is likely to hurt Greece’s fragile economic recovery”, said Peter Rosenstreich, Head of Market Strategy at Swissquote. “Reviewing the past effect of uncertain elections in Greece (2012), there is a clear pattern of EUR downtrend acceleration”.