Do The Greek Debt Negotiations Present An Opportunity To Trade The EUR/USD Currency Pair?

Right now with the discussions going on in the European Union which include the International Monetary Fund (IMF) involving Greece and the massive amount of debt that this country is dealing with, there always seems to be an impact in the value of the EUR/USD currency pair whenever there is significant news that is announced regarding this situation. If you are a fundamental trader who like to take economic news into consideration when trading a currency pair, this is a story that you should follow because it presents a unique opportunity to predict whether the value of the EUR/USD will go up or down based on whether this news is positive or negative.

The situation that we are looking at is that the country of Greece right now has a massive amount of debt into the billions of dollars worth of loans that it has borrowed, and the country is now at risk of defaulting on these loans because they simply cannot pay it all back. What we saw recently was that the talks about restructuring the debt for Greece had hit a stalemate and the previous deadline that they had set had to be moved forward. This caused the EUR/USD to retreat from three-week highs rather quickly in a move over 100 pips over the course of the trading day, and this is an example of how news regarding the Greek debt negotiations can lead to forex trading opportunities.

As a basic rule regarding this situation, any news that seems positive or optimistic regarding the debt talks will make the EUR/USD go up, and negative or pessimistic news will make the EUR/USD go down just like we saw when the deadline had to be pushed back and the currency pair went down. The credit rating agency Standard & Poor’s also said recently on CNBC that they are likely to downgrade Greece’s credit rating, and if this news ever breaks then you can bet it will be an opportunity to earn pips by selling the EUR/USD.

There are many traders that believe in using fundamental analysis to try and predict market behavior, and many of these fundamental forex trading strategies are based upon economic indicator values that are released on a regular schedule. It is not every day that a big international news story comes along that presents an opportunity for fundamental trading signals. By following the story regarding the Greece debt negotiations and remembering the basic rule that optimistic news will make the Euro go up and pessimistic news will make the Euro go down, you might be able to earn some extra pips in the forex market by trading the EUR/USD currency pair.