The euro is marching higher and there is no stopping it for now
The single european currency has marched higher in late London and early New York trading marking substantial gains for the day as we correctly forecasted in our analysis yesterday. The EUR/USD pair is on track for its biggest daily gain in a while and we think that this is not an isolated incident only for Tuesday.
The news from Greek finance minsiter Yanis Varoufakis that there could be a program for swapping debt for growth indexed bonds has appealed to the markets which sent the European stock markets and the single currency higher in the aftermath of the news.
As we are approaching Wednesday there are several ways in which the EUR/USD can continue to move going forward. However we are not worried nor puzzled about the direction, but rather how low can the pair go before we can safely buy into the weakness again.
The first immediate support is around 1.1450 which is we're putting our money. We only think that a break below 1.1420 can expose the downside, but find it highly unlikely just like we did yesterday. the EUR/USD is likely to move up to test 1.1700 before the end of the week, and any move down should be used as a call buying opportunity.
So why did the euro rally today so sharply? Because the market has been oversold for quite a while. The EUR/USD marked its high above 1.15 in New York trading confirming our analysis from yesterday and skyrocketing higher as stop loss orders on the forex market have been triggered.
With the pair consolidating its massive move just below 1.15 its only a matter of time before we see a test of the 1.1550 and a knock on the door of 1.1600 if we would have to guess when would that happen its most likely tomorrow in New York again.