EUR/USD Forecast February 9, 2012, Technical Analysis

EUR/USD had a fairly quiet day as the world awaits the results of the talks between Athens and the Troika. The debt negotiations continue to drag on, and one has to wonder how much longer this can go on.

The area is the 38.2% Fibonacci retrace of the recent fall, and this area continues to be somewhat interesting to larger order flows. The area has held as resistive so far, but this probably is just as much due to the markets waiting for the agreement than massive sell orders.

We need to see the daily range closed outside of in order to get our next signal. Obviously, if the talks break down - the EUR/USD is to be sold right away and at any level. However, there is a real chance that the agreement that comes forth might be something the markets will have to weigh over time, and perhaps express its true opinion a bit later. At the moment, we don't like this pair at all, but have to think a lot is already baked into the price. A rally could be sold at the 1.35 level at the first sign of weakness as the market will have plenty to look to for Euro weakness after this agreement is reached.