Eur/usd - page 288
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EUR/USD weekly outlook: June 29 - July 3
The euro slid lower against the dollar and the other major currencies on Friday pressured lower amid uncertainty as negotiations between Greece and its international lenders continued.
EUR/USD was down 0.35% to 1.1164 in late trade, and ended the week with losses of 1.74%.
The single currency was also lower against the traditional safe haven yen and Swiss franc, with EUR/JPY at 138.32 and EUR/CHF down 0.6% to 1.0429.
Sentiment on the single currency was hit by concerns over whether Greece could reach an agreement with its international lenders in time to avert a default.
Greece’s bailout is due to expire on Tuesday, the same day that Athens is due to repay €1.6 billion to the International Monetary Fund, but without a rescue package in place Greece will almost certainly default.
In the week ahead, investors will be focusing on developments in Greece after Prime Minister Alexis Tsipras abandoned negotiations with creditors on Saturday and called for a referendum to be held on July 5 on the terms proposed by lenders for extending the country’s bailout program.
European finance ministers refused a request from the Greek government to extend the bailout program until after the referendum.
The European Central Bank said Sunday it will continue providing emergency liquidity assistance to Greece’s banks, but capped emergency funding at current levels. The ECB said it was monitoring the situation and stood ready "to reconsider its decision."
Greek officials were to hold talks later Sunday to discuss measures to avert a mounting crisis in the banking sector after deposit outflows accelerated over the weekend.
Later in the week market participants will be turning their attention to the latest U.S. employment report, due for release one day ahead of schedule on Thursday, for signs of improvement in the labor market, which the Federal Reserve has said is a key factor in deciding when to start hiking interest rates.
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Greece to introduce capital controls, keep banks shut as crisis deepens
Greece will introduce capital controls and keep its banks closed on Monday after international creditors refused to extend the country's bailout and savers queued to withdraw cash, taking Athens' standoff to a dangerous new level.
The Athens stock exchange will also be closed as the government tries to manage the financial fallout of the disagreement with the European Union and the International Monetary Fund.
Greece's banks, kept afloat by emergency funding from the European Central Bank, are on the front line as Athens moves towards defaulting on a 1.6 billion euros payment due to the International Monetary Fund on Tuesday.
Greece blamed the ECB, which had made it difficult for the banks to open because it froze the level of funding support rather than increasing it to cover a rise in withdrawals from worried depositors, for the moves.
Prime Minister Alexis Tsipras said the decision to reject Greece's request for a short extension of the bailout program was "an unprecedented act" that called into question the ability of a country to decide an issue affecting its sovereign rights. "This decision led the ECB today to limit the liquidity of Greek banks and forced the central bank of Greece to propose a bank holiday and a restriction on bank withdrawals," he said in a televised address.
Amid drama in Greece, where a clear majority of people want to remain inside the euro, the next few days present a major challenge to the integrity of the 16-year-old euro zone currency bloc. The consequences for markets and the wider financial system are unclear.
Greece's left-wing Syriza government had for months been negotiating a deal to release funding in time for its IMF payment. Then suddenly, in the early hours of Saturday, Tspiras asked for extra time to enable Greeks to vote in a referendum on the terms of the deal.
Creditors turned down this request, leaving little option for Greece but to default, piling further pressure on the country's banking system.
The creditors want Greece to cut pensions and raise taxes in ways that Tsipras has long argued would deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed.
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Forex - Euro Dives as Uncertainty Looms; Greece Calls Referendum
Cornered by Greece's unruly debt situation Greek Prime Minister Alexis Tsipras has decided to hold a referendum on accepting austerity measures set out by the nations creditors, sending the Euro sharply lower against its major trading peers on Monday.
Greek banks are set to remain closed on Monday as the government tries to contain a bank run following heavy withdrawals last week amid uncertainty over Greece's future in the European Union (EU).
The EUR/USD traded 1.49% lower on Monday morning in Asia when trading desks opened, plunging from $1.1167 where the pair closed last week in US markets, to $1.0092, its lowest in almost a month.
The euro tumbled 2.68% against the Japanese yen to ¥134.59 on Monday, and was down 1.44% against the Australian dollar at $1.4462.
Against the British Pound the euro had fallen some 1.14% to trade at £0.7001, close to its lowest levels since late 2007.
"The situation in Greece is unclear and calling for referendum two days before the key payment to the IMF is due is a hazardous behavior from Greek official. The currency market short term penalty for this can bring euro down as low as $1.05 near term," Ladislav Benedek, senior currency dealer at Intesa San Paolo in Bratislava, told WBP Online on Sunday.
Greece is due to repay €1.6 billion to the International Monetary Fund on June 30, however, Greece currently has no means of paying the debt unless an extension to its bailout funds are agreed upon.
For this to happen, Greece would have to compromise ways to draw down spending measures, such as cuts to pensions, which had drawn much criticism after Tsipras campaigned last year on bringing an end austerity.
Tsipras is now left with little option as time is running out for Greece, hence why he has called for a referendum. The referendum on whether or not Greece should accept austerity measures will be held on July 5.
A vote against accepting creditors' demands could mean the end of Greece in the EU and will likely create great financial instability across Europe and beyond.
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On Friday session the EURUSD fell and closed in the red near the low of the day, below the 50-moving average. The Greek drama is coming to an end as Greece prepares to hold a referendum on July the 5th over its bailout program. Key levels to watch today the 1.1097 daily support, 1.1058 Fibonacci retracement (38.2) and 1.0955 Fibonacci retracement (50.0).
EUR recorded a decrease against USD on Friday. The session started at a price of 1.1203 around noon and the pair reached the highest level for the day at 1.1219. After lunch direction went down at the end of the day the euro finished at a rate of 1.1169. In case that the downward trend of the last few days continues, the pair will move to the first support at 1.0815.
Euro recovers from lows supported by SNB intervention
The euro regained ground against the other major currencies on Monday after the Swiss National Bank said it intervened in markets to weaken the franc, following early steep losses driven by fears over the escalating crisis in Greece.
EUR/CHF was last at 1.0389, off 0.4% for the day after falling as low as 1.0314 overnight.
SNB Chairman Thomas Jordan said Monday the bank had intervened "in order to stabilize the markets," which were thrown into turmoil after Greece announced an emergency bank shutdown.
The current market turmoil over Greece's failure to reach a deal with its creditors "justifies such an action," Jordan said.
The comments came during an international finance forum in Bern.
Last week Jordan warned that the franc is “considerably overvalued” and reiterated that the bank would continue to weaken it by intervening in currency markets.
The Swiss franc is seen as a safe haven investment because of Switzerland's current account surplus, which means it’s not reliant on foreign investment to fund its budget.
The Greek government ordered an emergency bank shutdown on Sunday night and the central bank moved to impose capital controls as the banking system neared insolvency after deposit outflows accelerated over the weekend.
Hours earlier the ECB said it would continue providing emergency liquidity assistance to Greece’s banks, but capped emergency funding at current levels.
Greece broke off negotiations with creditors on Saturday and in a surprise move Prime Minister Alexis Tsipras called for a referendum to be held on July 5 on whether to accept the terms proposed by lenders for extending the country’s bailout.
European finance ministers refused a request from the Greek government to extend the bailout program, set to end on Tuesday, until after the referendum.
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EUR/USD: With or Without You Greece, Euro With Gains
The euro currency showed a fast recovery on Monday, jumping into the green territory from the deep opening gap as the EUR/USD pair initially suffered from the Greek talks fiasco over the weekend.
''The euro's resilience suggests that people don't believe that the EMU will fall apart, even if Greece exits,'' Rabobank senior currency strategist Jane Foley said. "Maybe the market doesn't believe that a Greek exit could create the type of contagion that it would have done a few years ago. But if there is a no vote at the weekend, that theory will be tested," she added,
The euro was trading 0.20% elevated at $1.1180 against the greenback, leaping from its four-week low at $1.0954 seen during the Asian market hours.
Summer heats up
Over the weekend, the market sentiment profoundly deteriorated as the crucial Eurogroup meeting ended in debacle. Therefore, Greece faces an important deadline as the debt-burdened nation is due to to pay off a €1.6 billion debt to the International Monetary Fund, something the nation currently does not have the money to do
Meanwhile, Greek Prime Minister Alexis Tsipras said that the nation's banks and stock market would be closed on Monday amid fears of a financial collapse. The country also set to impose capital controls that will limit the amount of funds that citizens can transfer or withdraw from its financial institutions.
Additionally, the Prime Minister called for a referendum on July 5 to vote on the creditors' latest proposals.
Meanwhile in the US, the National Association of Realtors published its pending home sales release in May, showing a rise of 0.9%, after the downwardly revised figure of 2.7% booked previously. Analysts had anticipated a 1.4% hike in May, but the data still showed a nine-year high.
Technical analysis
EUR/USD opened the new trading session with a huge gap down exceeding 1.5% below $1.1. As a panic sell off occurs, traders could see an opportunity in the meltdown as gaps tend to be filled during these times.
Strong support can be found around $1.0870 and on the other hand resistance is seen at the upper range of the gap at $1.1150. However, the strong rebound already spiked above the first resistance, setting up an intraday high slightly above the $1.12 level.
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What a huge Gap today, the Market is not stable due to Greece crisis.
Euro weaker as markets brace for Greece debt default
The euro held weaker in Asia on Tuesday as the final day of the second quarter and the month of June has placed all eyes on Greece as its government prepares to default on sovereign debt obligations.
EUR/USD traded at 1.1197, down 0.34%, while USD/JPY changed hands at 122.47, down 0.06% and AUD/USD was quoted at 0.7681, up 0.01%.
A last-minute series of phone calls and offers failed to reach a breakthrough on Greece's debt package by early Tuesday in Asia, setting the stage for volatile markets.
Talk swirled about the outcome of a planned July 5 referendum with Greece's Prime Minister Alexis Tsipras hinting Monday he might resign if the Greek people vote in favour of the creditors' proposal.
"If the (Greek) people vote yes, then the referendum outcome will be completely respected but I will not serve it" Tsipras said in a television interview. "I'm not an all weather prime minister. I will respect the verdict and prepare the ground as outlined by the constitution and the parliament."
Earlier in the day on Monday, President Barack Obama spoke to France's President Francois Hollande, urging renewed efforts to reach a deal, and then European Commission President Jean-Claude Juncker reportedly made a refined proposal that was rejected by the Greek government with the current bailout due to expire June 30 and no extension on offer.
In Australia, HIA new home sales for May fell 2.3%, a sharp drop from a 0.6% gain month-on-month last month and official housing credit for May gained 0.5%, meeting expectations, while private sector credit also rose 0.5% month-on-month, again matching seen results.
In Japan, average cash earnings rose 0.6% in May, a tad below the 0.7% gain seen year-on-year, but the second straight increase.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.23% at 95.30.
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Yesterday the EURUSD initially fell but found enough buying pressure at 1.0955 a Fibonacci retracement (50.0) to sky rocket and closed well in the green near the high of the day. The currency managed to close de downward Gap of 216 pips made on Sunday. Today we may expect a narrow range day after yesterday move of 246 pips. Key levels to watch 1.1237 the upper band of a daily resistance, the 1.1097 the lower band of a daily resistance.