Awaiting Greek default
The eurozone crisis continues. On Saturday Greece and European creditors did nor reach an agreement about debt restructuring and refunding. The international bailout program expires today – the country must pay €1.5bln to International monetary fund or declare a default. The European currency market is uncertain. The first breach of the 1.11299 level was not supported by investors, who were waiting for a fundamental confirmation. As a result, the price returned inside the channel from 1.11299 to 1.12373. The resistance at 1.12373 was not crossed either, so the price came back to the range. Low euro market liquidity offers an excellent manipulating opportunity to major players and stop order hunters. However, taking into consideration the H4 and the daily trends, we recommend to place only short positions. It is highly probable that several fake breakouts will be offset by a new fundamental trend.
We suppose that all the represented analysis tools have been giving bearish signals. The terminal impulse is expected after final breaching the important oscillator support at 31%. The level corresponds to the lower price channel boundary at 1.11299. A sell pending order may be placed at this mark. A stop loss may be placed at the Donchian Channel opposite boundary at 1.12829. This level is supported by the trend line and Parabolic historical values. The stop loss is supposed to be moved every four hours to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point.
|Sell stop||below 1.11299|
|Stop loss||above 1.12829|