Monday, June 11, 2012

Spanish Bailout Pushes EUR Currencies To Soar

Over the weekend, the EU Finance Ministers prepared a $125 Billion Bailout plan for Spain. This caused the markets to buy Euro big time, rendering technical supports and resistance useless for the forex week opening.

However, analysts say that even though EU came out with a promise to write a huge check for Spain, the bearish sentiment for the Euro remains as the market is still very uncertain of the Greek elections this coming June 17.

Meanwhile, some investors believe that this move was just a necessary action to provide cushion for a possible Socialist election victory in Greece which puts back the discussion of Greece leaving the Euro.

Regardless, this 4th bailout of yet another EU member nation could set a very dangerous precedent for other countries within and outside of the EU. Add to that the fact that IMF is not infusing anymore money into European Bailouts, this latest one included - choosing to instead just "monitor" the progress of Spain.

Thus, the knee jerk upmove for the Euro today will certainly lose momentum as the week progresses, possibly reversing back down on Wednesday.