4 Jun 2015
EUR/USD driven by Greece headlines
FXStreet (Buenos Aires) - Wild volatility dominated the forex board on Thursday, with the EUR/USD pair soaring over 120 pips in the first hour of trading of the European session. The pair surged to a fresh 2-week high of 1.1379, as German bonds continued to sink, and yields rose to 0.989%.
With no fundamental data released in Europe, the pair consolidated near its daily highs, until the release of US weekly unemployment claims that printed 276K in the week ending May 29. The improved employment figure, triggered some profit taking ahead of Friday's US Nonfarm Payroll release, but the bearish movement intensified on negative headlines coming from Greece, as Jean-Claude Juncker, President of the European Commission, said that not enough progress was made in the meeting held with Greek Prime Minister Tsipras on Wednesday.
US GDP downgraded by IMF, Fed should wait...
In parallel, the IMF released a report on the US economy, downgrading its 2015 GDP forecast to 2.5% from 3.1%, and saying a rate hike should be deferred, but at the same time, stated that the USD is moderately overvalued and weighing on growth, job creation and inflation.
The dollar maintained its strength, extending down to 1.1222, the US session low, on news Athens won't be paying the IMF the €312m due on Friday, but will request to pay the full €1.6m due this month, at the end of it. By the end of the American session, news hit the wires that the Greek finance ministry officially rejected the creditor's bailout proposal, keeping the pair into the red by the end of the day.
EUR/USD technical outlook
“Short term, the 1 hour chart shows that the price stands below a flat 20 SMA, currently around 1.1280, whilst the technical indicators are now in negative territory, lacking directional strength”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the price stands well above its moving averages, but the technical indicators continue heading lower from overbought levels, anticipation some additional declines, should the price break below 1.1220, the 61.8% retracement of the latest daily decline”.
Bednarik locates next support levels at 1.1220, 1.1160 and 1.1120, while she places resistances at 1.1280, 1.1340 and 1.1385.
With no fundamental data released in Europe, the pair consolidated near its daily highs, until the release of US weekly unemployment claims that printed 276K in the week ending May 29. The improved employment figure, triggered some profit taking ahead of Friday's US Nonfarm Payroll release, but the bearish movement intensified on negative headlines coming from Greece, as Jean-Claude Juncker, President of the European Commission, said that not enough progress was made in the meeting held with Greek Prime Minister Tsipras on Wednesday.
US GDP downgraded by IMF, Fed should wait...
In parallel, the IMF released a report on the US economy, downgrading its 2015 GDP forecast to 2.5% from 3.1%, and saying a rate hike should be deferred, but at the same time, stated that the USD is moderately overvalued and weighing on growth, job creation and inflation.
The dollar maintained its strength, extending down to 1.1222, the US session low, on news Athens won't be paying the IMF the €312m due on Friday, but will request to pay the full €1.6m due this month, at the end of it. By the end of the American session, news hit the wires that the Greek finance ministry officially rejected the creditor's bailout proposal, keeping the pair into the red by the end of the day.
EUR/USD technical outlook
“Short term, the 1 hour chart shows that the price stands below a flat 20 SMA, currently around 1.1280, whilst the technical indicators are now in negative territory, lacking directional strength”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the price stands well above its moving averages, but the technical indicators continue heading lower from overbought levels, anticipation some additional declines, should the price break below 1.1220, the 61.8% retracement of the latest daily decline”.
Bednarik locates next support levels at 1.1220, 1.1160 and 1.1120, while she places resistances at 1.1280, 1.1340 and 1.1385.