Greece default looms
Greece is heading towards bankruptcy unless it can reach a deal soon with its creditors. The nation must make a repayment on Friday 5 June – this is also the day the current bailout programme expires. It’s the same old story with Greece, and Athens needs to agree to certain austerity measures in order to unlock the next trance of the bailout which will go towards repayment. While no deal has been agreed upon, EUR/USD will remain under the cosh.
The US job report on Friday will be the highlight of the trading week, especially when you consider the negative first-quarter growth numbers from the US last week. The strength of the greenback is being called into question as an interest rate rise from the US seems less likely this year on the back of first-quarter GDP numbers.
EUR/USD has been in a downward trend for over two weeks now, and the support at $1.08 is the initial downside target. If that mark is cleared, $1.06 will be the next level of support. Currently acting as resistance is $1.10, and if that level is taken out $1.12 will be the next barrier to a rally.