On Monday EURUSD descended, rebounding from resistance of 1.2320, after a false breakdown on Friday. Since EURUSD pair is moving in accordance with news, one might find the reason in newsfeeds.
The Friday breakdown was an echo of numerous promises from supreme politicians of European Union about all-round aid to “difficult” members of the union.
After the promise to do everything possible for euro support and for Eurozone stability, EURUSD pair broke the support up to 1.2320, but could not consolidate on Friday, since the operators decided to exit the market after fixing the result.
On Monday the pair descended because of the disappointment that was provoked by Minister of Finance of Germany Wolfgang Shauble, who announced that the buyout of bonds from Spain and Italy is not going to happen. This step would allow lowering the profits of these papers and would make them attractive for investors also that would lessen the indebtedness of the governments of both countries.
Also the minister addressed abruptly the rumors about additional aid to moaning Greece. Minister made it clear that he does not consider the aid (write-off of 50 % of the debts and reconstruction of the main debt) insufficient and pointed unequivocally to inobservance of obligations towards the members- creditors by Greece. That leads to a low possibility of financial support.
Such readiness in words turn into inaction in reality. It is obvious that Germany does not like feeding others, but it is hard to function without the financial assistance and until the investors see it (or the situation improves) will not buy euro.
That is why if there aren’t new events, on Tuesday EURUSD pair must continue its descent.Social button for Joomla