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EUR/USD climbs again

The latest twists and turns in the Greek saga send EUR/USD higher once more.

All trading involves risk. Losses can exceed deposits.
Pound and euro coins
Source: Bloomberg

Light may be appearing at the end of the EUR/USD tunnel
Judging by the moves we have seen in EUR/USD over the last 48 hours, currency traders are increasingly factoring in that the negative weighting the Greeks bring to the euro might not be in place in the near future. The fact that there has not been a unanimous agreement from all parties is hardly surprising and if Greece wants to receive the next tranche of funding, it must surely be aware that the vast majority of compromise must come from itself.

This latest move has seen EUR/USD stretch away from the 50- and 100-day moving averages and edge ever closer to overbought territory on the relative strength index. One way or another, Greece will be enabled to remain part of the family (for now) and the current quantitative easing programme could well have its timeline increased, both of which should see the sellers come back in.

EUR/USD

UK interest rate unlikely to change
The UK continues to have a watching brief as they, like everyone else, try to assess where the Greek negotiations are. With the eurozone being the UK’s largest trade partner, GBP/USD has found itself tied to current levels and unable to move too far on the back of its own economic data releases.

Today will once again see a plethora of economic data releases as we await the UK interest rate decision. I will happily do a ‘Paddy Ashdown’ and offer to eat my hat should this current rate change. The US side of the equation will also be contributing with the latest release of US unemployment claims.

As much as the clamor for interest rate rises in the US might have died down, they are still head and shoulders ahead of everyone else including sterling. 

GBP/USD

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