The Spiegel story that Greece is considering dumping the euro put more pressure on the euro after a considerable correction yesterday that saw fiber slice through support in the 1.4770 area. Denials by Greece only managed to slow the decline.
Relative strength currency trading can be done either by looking at fundamentals or technicals. Right now the euro has run into some serious fundamental weakness and if politicians aren't able to calm the fears we might see renewed pressure on peripheral debt in the eurozone. In the weeks leading up the the April and May ECB meetings debt problems didn't manage to have a marked impact on the euro's strength.
The declines of today and yesterday suggest this situation could be reversing. The risk here is that if Greece exits, whose next? An exit and a subsequent devaluation would wreak havoc across the eurozone and even beyond. The coming week will tell whether the euro will be able to overcome this patch of weakness. If not, look to be selling the euro, especially on signs of weakness in the sovereign debt market.
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