In five days, the talks between Greece and the Eurogroup failed twice. The ECB has agreed to fund 60 billion euros on February 5. Today, they will reassess. Eurogroup President Dijsselbloem said that until Friday Greece had to request an extension, otherwise the bailout would expire at the end of the month. If Greece exits from the eurozone, the single European currency will be dismantled.
The US dollar fell against the euro after the weak manufacturing data. The headline general business conditions index edged down two points to 7.8. The new orders index fell five points to 1.2.
Technical view. The pair has weekly resistance at 1.1535. The trading pattern is framed between 1.1535 and 1.11. At yesterday's session, the pair breached the previous swing high, but was unable to close above it. On the h4 chart, we can observe a minor inverse pattern. The prices are facing strong resistance near the neckline. The overall trend favors bears. The recent development in Greece supported the euro and the weak US dollar supported the pair. We recommend fresh buying above 1.1460 with the targets at 1.1500 and 1.1530. We can expect strong momentum only above 1.1535. Today, we expect high volatility.
Resistance: 1.1460, 1.1500, 1.1535.
Support: 1.1390, 1.1365, 1.1320.
We recommend selling with sl at 1.1455.
Buying above 1.1460.
The pound sterling. The Consumer Prices Index fell to 0.3% in January 2015, down from 0.5% in December 2014. Falling prices for motor fuels and food were the main contributors to the slowdown in the inflation rate. The oil prices sank to a 6-year low.
Today, traders are keeping an eye on BoE monetary policy. From the US side, US PPI report and building permits are due.
Technical view. The pound edged lower against the US dollar. In intraday, the cable broke below 50Dsma, but at the end of the day it managed to close above it. The cable managed twice to hold the 50Dsma. On the hourly chart, the prices were trading and closed below hourly moving averages. We recommend selling only below 1.5300. The prices made a minor support base between 1.5210 and 1.5195. If the price breaks out and closes below 1.5195, the pair can extend correction towards 1.5140, 1.5080, and 1.4990. As of now, we are bullish in the near term. This view is invalid, in case if the prices close below 1.5190.
Resistance: 1.5369, 1.5402, 1.5440.
Support: 1.5340, 1.5300, 1.5210.
We recommend selling below 1.5300 with the targets at 1.5250 and 1.5210.
Buying above 1.5400 with the targets at 1.5440, 1.5470, 1.5540, and 1.5600.
Uitgevoerd door, Analytische expert
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