The Greek debt is still containing the current market sentiment effecting negatively on the single currency which dipped below 1.36 by the end of last week on increased worries about the ability of Greek to meet the other members trust in its ability to sustain its debt at the current low levels of growth in the Euro zone bringing back its deficit to the growth ratio below 3% which is not looking coming soon at the current struggling growth rates which resulted from the credit crisis as even the ECB could not stop any of its accommodative easing actions worrying about the current nascent recovery until now which can put more pressure on the reforming plans in Greece from another side.

The forex market has realized now that there is no bailing out plan currently from the other EU member after the EU summit last Thursday and the EU fin ministers meeting in the beginning of this week but just the political underpinning waiting for signs from Greece that there are effective efforts from its side but the most worrying thing is that this same problem is threating other EU members like Spain and Portugal with no clear mechanism to the market for solving such economic situation in the case of exacerbation inside the Euro zone which can effect negatively on the single currency back securities holding underpinning the risk aversion sentiment and the greenback from another side.

The single currency could close hardly last week above 1.36 making a new lower low at 1.353 than what it has made after breaking 1.382 at 1.3585 which can be an intermediate support right now followed by 1.343 which has been the formed bottom of last May and after that the support can emerging at 1.29 whereas the pair higher low of its rally reaching 1.513 in the beginning of last December while the main resistance is existing right now just above 1.40 psychological level when it failed to break above 1.404 earlier, the pair can find difficulty to get above 1.482 after failing last week to make it which could add momentum to the currency downward trend.


God willing, we are to turn back to the US equities market and the Dow ability to stand above 100000 today after last Friday gaining as the US market was closed yesterday on the US presidency day. We wait today for NY Fed manufacturing index of Feb to be 16 from 15.92 in Jan and December total net long term TIC inflows to be 50B$ from 126.8B$ in November and tomorrow, we wait for US housing starts of January to be 580k from 557k in December and Jan US building permits to be 650k from 653k in December.

Best wishes

FX Consultant
Walid Salah El Din
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