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Official confirmation of the European Union QE program by the ECB led to steep declines in the EURUSD last week as the pair dropped from a high of 1.1679 to a low of 1.1114. The pair eventually closed the week at 1.1202 after having fallen as much as 565 pips (5.65 cents). The weekly decline from Open price to Close price was the largest since September 2011. All eyes were set on the outcome of the Greek election with anti-austerity party Syriza headed for success and the Greek voters delivered a strong message to the EU leadership that they have lost hope in the current course of the economy and the Troika led austerity. The Greek economy has been through the worst economic period in its modern history and the Unemployment Rate and Youth Unemployment Rates have reached 25.8% and above 50% respectively. The country has been trapped in a cycle of debt and contraction with no rebound in sight.

Tsipras has formed a coalition government with the right wing Greek Independent Party and have a clear majority. With vote almost fully counted after Sunday's poll, Syriza is on course to have 149 seats, two seats short of an absolute majority. The Greek Independents are set to gain 13 seats in the 300-seat parliament granting the coalition in the region of 162 seats vs a minimum requirement of 151 seats.

The election result has the potential to undermine the current way of doing things and handling countries that are experiencing economic slowdown and is expected to be one of the main issues at Monday's meeting of 19 Eurozone finance ministers. The two most likely possibilities to develop from this point are:
1) Accommodation by European Union and an agreement for Greek debt restructuring (write-down) or a new Greek bailout
2) Confrontation leading to a Greek bank depositor bail-in as seen in Cyprus.

The difficulty with option 1 is that this opens the door to large scale debt restructuring or bailouts throughout the union and this will be highly problematic and costly. This avenue will lead to weakness and volatility in the Euro currency and will be an unprecedented step towards strengthening ties economically and inextricably between euro-area partners. Option two which revolves around not yielding to Greek demands of debt relief could open the door to a Greek exit from the euro and set a precedent for other struggling euro-are nations to follow. This direction is also likely to have negative implications for the strength of the euro currency.

EURUSD Support areas include 1.12, 1.150 1.1250, 1.1200, 1.1175, 1.1100, 1.10, 1.0950. Resistance levels above are at 1.14, 1.15, 1.16,1.1650,1.1700, 1.1800, 1.1975, 1.2000, 1.2200, 1.2300, 1.2380, 1.2402.

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EURUSD Pivot Point Table

Resistance 1 1.1288
Resistance 2 1.1336
Resistance 3 1.1411
Pivot 1.1213
Support 1 1.1164
Support 2 1.1090
Support 3 1.1041