Euro updates

Yesterday Fitch has downgraded for one more time Greece to CCC rating, placing its credit rating deep into the junk terriotry. However the Euro was rising on Wednesday and found resistance at the 1.4281.  The reason for that was the latest U.S debt warnings from Moody's and that Ben Bernanke is ready for a new stimulus plan in other words quantitative easing program. The latter has devaluated US dollar against its counter parties including Euro.

The timing of the news on US debt has helped Greece and Europe as the focus turned on the other side of the Atlantic, but the problem still remains in Europe. Greece at the moment does not have a new and fully funded financing program and the prime minister George Papandreou said that the euro zone and the IMF must quickly approve a second bail out for his country to avoid its economic reform plans to collapse.

The correction of the euro up to 1.4281 represents a 61.8 fibonacci retracement, is strong short term resistance and is a good point to go short if one considers technicals are working. With the fundamental problems of euro zone remaining unsolved the euro could go lower than 1.3837 support level that touched on Tuesday.

For the time being i wish you enjoy some mojitos or caipirinha on the beach while euro leaders will be struggling to save their creation, summer mood is the mood!!!!!!!!!!!!

have a nice summer 

EURUSD 14/07/2011 5:50am GMT