Greece hits euro again

EUR/USD is under fire again as Greece still weighs on the euro, while GDP/USD treads water.

Euro notes
Source: Bloomberg

Euro slides as Greek problems persist

EUR/USD has failed to recover from yesterday’s losses after the IMF team walked out on talks with Greece over its finances. Uncertainty still hangs over the euro as we are near the middle of June, and there is not deal in sight so Greece must make a number of repayments all in one go at the end the month. EUR/USD isn’t overly sensitive to the Greek situation, although it is the major news story that drives the currency pair, so any news announcement regarding Greece will push the market 1% in either direction.

EUR/USD has been in an upward trend since March but it failed to make another attempt on $1.14. The lack of progress over Greece could mean it is heading back to $1.12, and a move through that mark will make the support at $1.10 the target. A move higher will encounter resistance at $1.14, and beyond that the May high of $1.1467 will become the target.

Sterling holds $1.55

GBP/USD is pushing higher today, currently trading right in the middle of the $1.58-$1.52 range that it has been in for the past month. The pound has reacted well to the Mansion House speech and the positive retail sales from the US didn’t take the wind out of its sails. As I previously stated, the question over who will raise rates first leaves the US in front, but the gap between them and the UK is narrowing. Traders are quick to punish the dollar for soft economic data, and there isn’t always a buying spree of the greenback when the US economic announcements are positive.

At 3pm (London time), the US will report the University of Michigan consumer sentiment and the market is expecting a reading of 91.3, which compares with the May reading of 90.7. A strong set of numbers will send GBP/USD to the lower end of the range should estimates be exceeded.

The $1.5550 mark is the first upside target, and if that is taken out then $1.57 will be the next level to watch out for. A drop back below $1.55 will bring the support at $1.54 into play.

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