The new Spanish government is planning to reduce this year’s budget spending by 27B euro. They are also planning to implement tax hikes for big-scale companies. However, numerous economists say this is not enough to drag the Spanish economy out of the crisis. The current rate of unemployment is extremely high – 24%. Half of it is represented by the youth. The situation is escalating. Last week there were lots of protests all around the country as people showed their discontent with the government’s austerity measures.
The Euro Group decided to expand the EFSF form 500B up to 800B euro amid concerns over the situation in Italy and Spain .
In the meantime, EURUSD keeps rallying. According to the Department of Masterforex-V Trading System , the rally may encounter resistance around the 1.3384 high. However, if it is broken, February’s high at 1.3485 will become the next major level of resistance. If the price breaks below the bottom of the MF sloping channel and pivot 1.3253, it will trigger the bearish scenario. In this case, 1.3251 and 1.3133 will become the closest levels of support.
