During the poor week for crucial data we can see major focus on the eurozone’s currency due to Greek deal debates. Dollar was the most hot topic during the previous three weeks, now the turn is on euro and solution to the Greek crisis, permanently postponed due to failed negotiations.
As expected, after Greek proposal we could see an avalanche of euro area’s officials speaking about ‘good progress,’ or ‘working hard on solution,’ or ‘Greece has made good first step.’ Nevertheless, the real solution lies still far away from the horizon and euro traders know it. Although we can count on the fact, that such crisis is alreayd priced-in in the weak euro, we expect any negative or positive solution for the eurozone to bring additional volatility to the currency pair.
We will be now focusing on the emergency summit planned to start at June 25, last opportunity for a deal to be reached. If even this summit fails, we will be victims of daily bombarding by eurozone’s officials and Greek PM Tsipras until June 30 when an official deadline ends.
As this week brings no crucial events, which could offset Greek issue, only some preliminary PMI data with minor effect, providing only insight into euro area’s quantitative easing and its real impact, while couple of US releases, affecting the dollar could bring some moves as well.
Nevertheless, euro seems to be under Greece and risk-off/risk-on influence mostly as dollar remains calm after the Federal Open Market Committee (FOMC) statement from the next week and market is gettng prepared for FOMC Minutes, which could bring more light on policymakers’ decision and their expectations.
From the technical point of view, we can expect the euro to ease further to $1.1228, or $1.1191 today, while later we can expect the support at $1.0875 to be reached if any negative news for the euro or boosting for the dollar comes out.
As for the resistance level, we can see a proper take profit level at $1.1367, while the next one can be seen at $1.1443.
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