Dmitri Lysenko
Germany seems to be willing to support Greece in its effort to preserve the eurozone membership. Angela Merkel said during one of her recent speeches that Greece was diligently implementing reforms and got an opportunity to overcome the crisis. However, she said, it is necessary to take some extra austerity steps.
The offered debt-restructuring plan was implemented without violating any agreements. Therefore, Greece deserves support. Moreover, if all the eurozone states will strive for budget deficit reduction, the recovery process will go much faster.
According to Angela Merkel, complex reforms in all the sectors – from finances to labor market – is the only way out in this situation.
Obviously, the European authorities should realize that cooperation is needed in order to resolve the eurozone problems. The problems of Greece, Italy, Portugal and other countries cannot be considered separately as these economies are parts of the eurozone, a union with close economic and financial ties.
The leaders of 25 EU states signed a budgetary pact on March 2nd 2012 in Brussels. This pact well may turn into a crucial step on the way to Europe’s common fiscal policy. The pact implies tough sanctions against budget discipline violators. Only the UK and Czech Republic didn’t signed the pact, which was a big deal as only 12 signs were needed to approve the agreement.
According to experts, yesterday’s downswing made by EURUSD was supported by trading volume. So far, 1.3067 (the weekly volume cluster) looks crucial for short-term trading decisions.
The level is the closest major level of support. Once it is broken, the bearish movement may go further down to 1.3025, 1.3006 and 1.2965. The closest levels of resistance are 1.3080, 1.3110. 1.3137.In general, the bears seem to be dominating the market at this point.
Dmitri Lysenko
