The single currency is still under pressure on the markets worries about the Greek debt outlook and its negative impact on the other debt ailing European countries with the current obvious difference between Germany and the ECB on the way of sharing the private sector in the risk of holding its debt and this negative market sentiment could drag the single currency down despite the ECB hinting of a close interest rate hike to come in introductory statement to the press conference by saying that risks to the outlook for price stability are on the upside and Accordingly, strong vigilance is warranted from saying after May meeting that the ECB is very closely watching the prices which always hints to the markets that there is no close rate hike decision and that what has been seen in June meeting when the ECB held the interest rate unchanged at 1.25% last Thursday.

God Willing, The single currency next supporting level versus the greenback is now at 1.4306 after breaking 1.445 supporting level on increased worries about the US economic growth outlook and the possibility of downgrading its debt by Fitch and this is the second warning after S&P had done because of the US growing debt concerns which could contain the market sentiment by the end of last week to dampen the investors' risk appetite helping the low yielding funding currencies such as the Japanese yen and the greenback which can draw the single currency down further breaking 1.4306 on growing technical pressure can be resulted from making a lower high at 1.4695 below 1.4939 too and this can lead it to test 1.4182 and failing to hold above it can put more pressure on it to set back to 1.4056,1.4011 then 1.3965 which has been reached last month because of the growing worries about Greece debt too.

 

Kind Regards

FX Market Strategist

Walid Salah El Din

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