While the markets were waiting for the European Economic and Financial Affairs Council meeting results, The Single currency has managed to ease back again versus the greenback under the pressure of having €2.5B EU Trade Balance deficit in July while the markets were waiting for €1.7B surplus from €1.5B deficit in June after it had failed to get over its previous resistance at 1.3935 falling below 1.377 whereas it has started its rising following the news of offering 3 months loans by the ECB for the European banks in an coordinated action with the Fed, SNB, BOE and BOJ for underpinning the US dollar liquidity into the European banking system for longer time as this has been allowed for just one week by the ECB.

God willing, further EURUSD declining can meet over the short term supporting levels at 1.3702, 1.3635, 1.3554 then 1.3494 again whereas it has started to correct its loses reaching the current levels and the breaking of it can open the door for further falling to 1.2873 which has been recorded low of this year on the 10th of last January while the way of ascending can face resistance again at 1.3935 then the psychological level at 1.4 and the breaking of it can lead to a higher resistance at 1.4278 which has been reached by the SNB's action to limit the EURCHF drawing down over 1.2 last week but it could not hold its gains falling back again on persisting worries about the European economy after the ECB had downgraded its forecasts of the EU growth in 2011 and 2012 without hinting about new steps to stimulate the economy, while the worries about Greece were ascending by suspending the talking between the lending troika and Greece from a side and from another side by Greece Fin Min announcement about the Greek GDP shrinking this year by more than 5% while it was expected to be by just 3.8% on the back of the negative impact of the taken austerities measures by the Greek government.

Kind Regards

FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com