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Euro edges lower
EUR/USD is close to its lowest level in one month due to the strength of the greenback. As I stated previously, the sentiment in the market has shifted towards the possibility of an interest rate rise in the US sometime between June and September. The US will announce the beige book update on Wednesday at 7pm, and this will give traders a better idea of how the US economy is faring. Even though the economic indicators have begun to show some weakness in the recovery, the US central bank is keen to move away from ultra-low interest rates this year, and this will keep EUR/USD in its downward trend.
The issue of Greece is still bubbling away in the background, and it will resurface at the back-end of this week when the indebted country will be required to propose a series of reforms to its creditors. The market is expecting the reforms to be accepted, but that is not to say that the political wrangling will go smoothly, and this will keep the pressure on the euro.
The first target to the downside is $1.05, if that mark is taken out the recent low of $1.0462 will be in sight. Acting as resistance is $1.06. Beyond that, traders will look to the 50-hour moving average of $1.0620, and if that mark is cleared the next level of resistance will be the $1.0670-80 region.