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EUR/USD Retreats after ECB's Decision with Greek Debt

The ECB commented today that it will no longer be accepting Greek debt as collateral. This reminds traders that the new Greek government has a full plate in dealing with its bailout program. Not surprisingly, traders faded the EUR/USD during the 2/4 session after making it up to 1.15 during the 2/3 session.

EUR/USD 4H Chart 2/4

(click to enlarge)

In the 4H chart, we can see that the market has been consolidating since last week, after it made a new low on the year around 1.11. When it tagged 1.1540, it respected it as resistance - it was a support pivot in the previous consolidation range. Price fell harder after ECB's announcement, and EUR/USD is entering the 2/5 session just above the 1.13 handle. 

Holding above 1.13 keeps the bullish bias in the pair in the short-term, as it holds above the 50-period SMA and as the 4H RSI holds above 40. Volatility might decline ahead of the NFP on Friday, and any bullish outlook at this moment should be limited to 1.15-1.1540.

To the downside, if price breaks below 1.13, the pressure will be back to the 1.11 low, but it will likely be after the NFP before EUR/USD can reach this low and threaten to break lower. 

It's time to stay away from EUR/USD as it traders around 1.13, unless you are looking to scalp an intra-session rally. The 1.13 area is the middle of the consolidation price range and thus there is no directional bias from the 1.13 handle (except for a slight bullish bias in the near-term, which is likely to be resolved even if EUR/USD reaches 1.14.