EURUSD Opens With a Big Gap Amid Greek Crisis

The Euro (EUR) opened with a huge gap against the US Dollar (USD) on Monday, dragging the price of EURUSD to less than even 1.1020, the multi-week low following the unprecedented closure of banks in Greece. The technical bias already remains bearish for EURUSD due to a Lower Higher and Lower Low in the recent wave on daily chart.

Technical Analysis

As of this writing, the pair is being traded around 1.1014. A support can be noted near 1.0970, the 23.6% fib level ahead of 0.0818, the low of the recent downside dip as demonstrated in the following daily chart.

On the upside, the pair is expected to face a hurdle near 1.1063, the 38.2% fib level ahead of 1.1139, the 50% fib level and then 1.1443, the high of the last major upside rally. The technical bias will remain bearish as long as the 1.0818 support area is intact.

Unprecedented Announcement

Greece shut its banks and imposed capital controls in a dead-of-night announcement designed to avert the collapse of its financial system as the country edges closer to an exit from the euro. The measures, which were announced just before 3 a.m. in Athens, limit daily cash withdrawals to 60 euros ($66) and ban payments and transfers abroad, according to the decree. Banks will be closed at least until July 6.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around 1.0800 support area appears to be a good strategy if we get a bullish pin bar or bullish engulfing candle near that level. To optimize profitability in forex trading, it is always recommended to use proper risk/reward ratios.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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