The EUR/USD pair continues to show massive bearish pressure on Tuesday as the drama from Europe seemingly never stops. At the end of the session, the former Greek Prime Minister Mr. Papademos stated that there was a “real” risk of Greece leaving the European Union. It cannot be overlooked that the European leaders are meeting today in order to try and come up with some solutions, although it has also been publicly stated that the problem of Greece isn’t necessarily going to be front and center. (This really makes me think that European politicians are even worse than American ones.)
So while the Europeans are still taking their sweet time about the problems, we now have firebombs being thrown by former leaders. This is more than likely just a ploy to bilk the rest of Europe out of cash during the meeting and by making noise the market might push the Germans into footing the bill for Athens. With all of this as a backdrop, it’s really hard to get bullish on the Euro, and it never ceases to amaze me that there is someone out there to try and pick it up every time it falls, only to feign surprise when it falls yet again.
Reality
The reality of the situation in Europe is Greece is bankrupt. So are several other countries, but Greece is the one being paid attention to at the moment. By all means, the Spanish issues are a massive problem just waiting to happen as well. In theory, there is no way to bailout Spain as it is far too big to fail. Of course, all money is based on nothing in particular when you break it down, so I doubt that.
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None the less, it is a disaster waiting to happen. By far, the downside still has a lot more going for it than the upside, so I will sell. Looking at the chart, a break of the 1.2650 level looks like a sell to me. Also, rallies that fail at 1.28 and 1.30 are great for selling too. I will not buy at all.