Dollar dominates

The greenback is in demand as traders are rattled by the Greek debt crisis, but EUR/USD and GBP/USD are recouping their losses.

Source: Bloomberg

Euro bounces back
EUR/USD has pulled back some of the losses it endured after the catastrophic news that Greek banks will remain shut until next week, and the nation is set for a crunch referendum at the weekend. It must be said that the euro is holding up relatively well against the dollar in what could be the beginning of the end for the Greece’s membership of the currency union.  For the time being, the dust has settled, and confidence is coming back – but should the situation in Greece take another sour turn, EUR/USD will quickly plunge.

EUR/USD has been trading higher this morning and the $1.10 mark is providing support, but the $1.11 level is proving a struggle for the currency pair. If $1.11 is cleared again the gap created at $1.1160 will be the target, and then $1.12 will be brought into play. An important level for the currency pair over the past three months has been $1.10. If it is cleared the support at $1.08 will be the next level to watch.

Sterling slides again
The pound has been punished by the strength of the dollar as traders seek a safe haven currency on the back of the Greek crisis. GBP/USD’s losses over the weekend are not over excessive, but given a lack of economic announcements from the UK today, sterling will struggle to find buyers. Today’s session is going to be dominated by the dollar and that market will be closely linked with Greece.

GBP/USD has been in an upward trend since April, and the bias is still to the upside, but the unpredictability of the Greek situation could trigger another sell off. Any move lower will find support in the $1.5550 area, and the resistance at $1.5770 is the first target to the upside, then $1.58 will be in sight.

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