Euro remains vulnerable for the seventh day against dollar amid political uncertainty in the euro zone.:Greek politicians are struggling to form a new government after the elections on the weekend.France has a new president, Francois HollandeGerman Chancellor Angela Merkel rejected government stimulus as the way to spur economic growth, setting up a clash with the new French president
According to Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce in London, “The Franco-German alliance is being destabilized but more importantly there’s this risk of contagion in Greece, particularly into the banking system.”
On a technical point of view, as you can see in the chart above, EURUSD has dropped well below the Ichimoku cloud on the daily chart and has cleared a key support by 1.3000. This can indicate that the pair will continue its declines possibly back to the lows of January 16th, at 1.2623. This being said, on a shorter-term basis the pair remains vulnerable due to being oversold, but any rallies should be well-capped below 1.3283.
By Kiana Danial at Forex Diva