The EUR/USD pair fell hard during the Tuesday session as fears of a breakup in the region continue. Adding to this pressure was the comments from former Prime Minister of Greece Mr. Papademos, who stated that the risk of Greece leaving the European Union was very real. This seemed to be enough to spook traders in the late hours of trading. Certainly, if there was a risk of bad headlines coming out overnight, the Americans didn’t want to hold onto the currency.
The 1.2650 area seems to be the support that the pair is counting on at the moment. However, we don’t see this as a major support level, and believe that we are still going to the 1.25 level given enough time. Rallies are sold by use when they show signs of weakness, and fresh new lows are sold as well. Buying isn’t a thought until we are well above the 1.30 level.
Written by FX Empire