The Eurodollar has been trending downwards since May 2014, with repeated disinflationary threats in the Eurozone, the European Central Bank embarked on a wide scale asset repurchasing programme. Additionally, there is strong potential for Greece to default on its loans, unless there is a last minute deal with its creditors. Despite recent weakness, the dollar has strengthened as a result of positive comments from Fed Chair Janet Yellen. These fundamentals look set to continue especially in the short-term as the Euro struggles to gain any momentum against its major currency peers. Clearly, these circumstances present short-term investment opportunities in the EUR/USD.
Investors Notes:
- The Greek interior Minister, Nikos Voutsis, stated publicly that Greek repayments “will not be given, and (the money) is not there to be given”
- There has been considerable sell off in the Eurodollar over the last week after losing momentum of a bullish trend- highlighted by a series of bearish candlesticks.
- The start of a death-cross of the 10 day moving average over the 20 day moving average, indicates the downward trend is beginning to take over.
- A bearish crossover in the MACD daily confirms the downward trend with a significant and sustained break below support on RSI.
- Banc De Binary analysts predict that weakness will continue in the Eurodollar pair.