Greece returns to haunt the euro

EUR/USD was one of the more interesting pairs to watch as a combination of a stronger greenback and weaker euro saw it drop to a one-month low.

Source: Bloomberg

The pair was trading at around $1.1200 on Friday and has since dipped below the $1.1000 handle for the first time since April 29. There is plenty of talk around Greece at the moment, with €1.6 billion worth of payments over four tranches due in June.

There are fears Greece does not actually have the money and, given the last €750 million payment was made using reserves already with the IMF (which it needs to pay back anyway), the situation is a bit grim at the moment.

I feel headline risk around the event will be rampant this week and could keep the single currency on the back foot. The short-term uptrend which was in place since April lows has also now been broken and the price action is likely to come under further pressure in the near term. A close below $1.1000 could encourage further short-term selling pressure.

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