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EUR/USD ahead of the Greek elections

As the market weights up the ramifications of the Spanish bailout, that boosted risk appetite at the beginning of the week , the EUR/USD is once again hovering around the 1.25 level after bouncing off 1.244 support area on Monday’s high volatile session. Price action until the end of the week is likely to remain determined by headlines ahead of the key risk event of Greek elections. With a swathe of US economic data coming out until the end of the week and expectations calling for Retail Sales, consumer confidence and manufacturing activity to drop, the US dollar could tick lower. If one also considers that no horrible news out of Europe are actually good news for the single currency, the EUR/USD could move to the upside with any rallies likely to be sold. As the whipsaw price action is indicating that neither the bulls nor the bears are in control for now, a clear direction and break out of the current 1.2612-1.2451 range are only expected after the weekend’s elections. A close below 1.24 would open the door for further downside movement towards May 2012 low at 1.19.

Dafni Serdari
Market analyst
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