Greece is still an issue
The euro is still feeling the pinch from Greece even though the indebted nation repaid the International Monetary Fund yesterday. Athens now has five working days to come up with reforms that are acceptable to its creditors. This situation is all too common place within the eurozone, whereby Greece survives from deadline to deadline, and as soon as the country receives a confidence boost it is quickly eroded.
To add to the single currency’s woes is the renewed strength of the greenback, and as Alastair McCaig stated, the indecision in the Fed minutes has triggered a spate of US dollar buying. The US central bank may not be looking to increase interest rates between now and June, but the possibility of a rate rise between June and September is now on the cards, and this will keep the pressure on EUR/USD.
The downside target is $1.06 and if that level is punctured then $1.05 will be in sight. Any moves higher for EUR/USD will run into resistance in the $1.0670-80 region, and $1.07 will also provide a barrier to an upside move.