USD may not yet be rising against the Euro yet

Fig 1 USD Euro Weekly

 

I have been follow the development in Europe right now as the Greek's debt negotiation is a very interesting piece of history. Imagine that you owe people EUR200bn and you are not only asking for people to forgive part of your debt, you are asking for more loans.

 

I was very much dismay that Tsipras practically use the whole country chip by calling for a referendum to oppose the austerity implementation. hoping the move will deter European Union would back down from their position.

 

I guess in the end, he and his country men knew that the game is up. European Union held their stand and was ready for Greece to exit the Euro. While he has to answer his fellow country men, they have to answer to theirs as well.

 

I am very surprised that what Tsipras proposed is an equally harsh measures to reform his country. The referendum it seems have sent a message to both the politicians and the people, it is more crucial that they remain in Euro rather than dropping the Austerity measures. The events unfolding this week is an absolute hell in Greece, bank closures, ration of money flow, empty shelves and totally no way out.

 

Tripras asked to the parliament to support his proposal, it passed with a majority of 251 for,  32 objects and 9 abstained. There was no protest an the streets against this proposal. I guess that the Greeks have a realisation that they have to face up the fact of hardship and this is not about democracy but responsibility and accountability. Bottomline is that the people chose the government and that how the government behave is the responsibility of the people. The people have closed their eyes when past government misbehaved, they have to live with the consequences.

 

Now back to the Euro. I have made some changes to the chart read and replaced RSI with MACD. Both RSI and Stochastic are too similar and that they almost always agree with each other and I definitely need a second opinion that deviates from the first one.

 

While weakness is seen on Euro when recent events unfolded, nevertheless the retracement is negligible compare with the major move. I have estimated that the Euro may drop below USD1, but the time has not yet arrived.  It is very likely the USD-Euro is in a B wave of counter wave. The pattern certainly shows this. Looking at MACD, it is also clear that the indicator remains in a negative zone.

 

As such, Euro is presently at half mast and there are some more way to go. Present support of USD is at Eur0.842. This also happens to be the neckline of this counter.