EUR/USD is continuing to consolidate. support level @ 1.1130 and resistance @ 1.1200.
11PM London time is the decision on Greece debt.
EUR/USD: Euro Dives as Merkel Refuses Third Bailout Request
Having traded virtually unchanged earlier, the pair slipped lower during the US morning trading after the revived hopes of a possible deal were destroyed by the euro zone's power player Germany.
German Chancellor Angela Merkel cast a dark shadow on dawning hopes of a further bailout for Greece, as she refused negotiations on a third bailout before Sunday, when the referendum in Athens is going to be held.
The pair left the flat position seen earlier and fell below $1.1150, losing about 0.90% over the day, while it had hovered around $1.12 before, unchanged on the day.
Consumer confidence in the US returned above 100 and improved from a revised 94.6 to end up at 101.4, the Conference Board advised on Tuesday.
The Chicago PMI for June remained in contraction territory, when it came out at 49.4, missing estimates of a 50.0 print, but improving from last month's 46.2.
"The market’s initial reaction to the Greek news may have been somewhat overblown as investors pushed rate hike expectations firmly into 2016. We believe the pricing out of 2015 rate hikes is unwarranted at the moment, with only a serious escalation of Greek tensions and definitive signs of contagion into other markets being viewed as enough to move the needle on hikes.In fact, we look for this week’s economic data to continue nudging the odds of a 2015 rate hike higher,"Gennadiy Goldberg,US Strategist at TD Securities wrote in a note on Tuesday.
Greece remains center stage as the country is likely to default on its IMF debt, which it has to pay back tonight, Greek Finance Minister Varoufakis said on Tuesday.
"Greece is due to make a EUR1.6 bln repayment to the IMF by midnight CET tonight, for which IMF Chief Lagarde has indicated there will be no grace period.With a default looking all but inevitable, S&P has downgraded Greece’s credit rating again to CCC-. A EUR3.5 bln payment to the ECB becomes due next month," analysts at Rabobank said in a note.
The most important news will come on Thursday, concretely the non-farm payrolls, along with the unemployment rate and jobless claims. Moreover, the manufacturing ISM is due on Wednesday.
CPI in the euro zone for June decreased from 0.3% to 0.2%, while the core gauge for June also ticked lower to 0.8%, from 0.9% previously, Eurostat advised on Tuesday.
Meanwhile, the German unemployment rate remained at 6.4%, indicating a strongly performing labor market, with the rate well below the euro zone average unemployment rate of 11.1%.
EUR/USD failed to break above 1.1250, bounced off the resistance at that level, moving to the downside again. It's currently testing the support at 1.1140. Should it break below that support it will likely continue towards 1.1030.
On yesterday session EURUSD fell as expected on a narrow range day and closed near the low of the day, creating an inside day. The currency is trading within a daily resistance from 1.1237 down to 1.1097. A breakout below the 1.1097 might trigger a selloff down to the 1.0955 a Fibonacci retracement (50.0).
EUR recorded a decrease against the dollar on Tuesday. The session started at a price of 1.1234, then went down and reached the lowest level for the day at 1.1118. At the end of the day the pair finished at a price of 1.1142 and if the euro continued to move down the target will be the first support located at 1.0953.
EUR/USD: Pair Prints Fresh Intraday Lows on Strong US Figures
The ISM manufacturing index for June ticked higher to 53.5, from 52.8 in May and beat analysts' expectations. Moreover, ISM prices paid remained below the 50.0 level, printing 49.5.
The pair was dropping on Wednesday, with the sell-off fueled mainly by solid US figures and Greece's messy situation, which changes practically every hour. Shortly after the ISM report, the euro was seen around 0.7% lower, buying 1.107 US dollars.
Much has been said about Greece in the previous months, but things finally came to a head on Tuesday when the country failed to pay its €1.6 billion debt to the International Monetary Fund (IMF) and defaulted.
The country fell into arrears and became the largest country to default on a debt to the IMF.
The manufacturing PMI for June came out slightly above estimates and printed 53.6, decelerating from from May's 54.0, Markit advised on Wednesday. The reading is still safely in the expansion territory.
The US economy created 237,000 jobs in May, according to the latest ADP report. The last reading stood at 201,000, while analysts had expected 218,000.
"The June ADP data came out stronger than expected, showing job gains of 237K (consensus 218K) with the May print revised slightly higher to 203K. The breadth of job gains was impressive across small (120K), medium (86K) and large (32K) companies, suggesting that gains were broad-based," Cheng Chen, US Macro & Rates Strategist at TD Securities wrote in a note on Wednesday.
However, the most crucial data will come on Thursday with the release of non-farm payrolls, the unemployment rate and jobless claims. Investors need solid job growth to re-start pricing in the possibility of a September rate hike from the Federal Reserve.
Meanwhile, markets are bracing for a possible storm on Sunday, when trading will reopen after the outcome of the Greek referendum, whether to accept creditors' demands, or leave the euro zone. Brokers will likely implement the close-only rule, following the massive sell-off last Sunday evening.
Later in the session, ECB's Governor Mario Draghi is expected to speak, although this should not be a market driver as Draghi will discus Target 2 mechanics. Comments on the current Greek situation, especially ELA usage, are unlikely.
"Judging from comments made by St Louis Fed President Bullard the FOMC may not place too much importance on Greece in monetary policy deliberations. Bullard argued that while it is a negative to have increased global uncertainty, any escalation would result in a surge of capital inflow into the US that would lower interest rates and offer stimulative support for the economy. Because of this, a September rate increase was still “very much in play” even suggesting that July shouldn’t be ruled out and that the data needed close monitoring," analysts at Bank of Tokyo-Mitsubishi said.
EUR/USD is currently testing the support at 1.1050 and should it break below that level it will likely continue towards 1.1000. That said, between the US Non-farm payrolls tomorrow and the Greek referendum on Sunday the future appears more and more uncertain.
EUR/USD remains under the resistance 1.1155 and as long as the level stands price will continue to drop I am targeting 1.1030 the next support level.
UR/USD: Pair Loses Almost 100 pips as Greece Optimism Forgotten
The pair was dropping on Wednesday, with the sell-off fueled mainly by solid US figures and Greece's messy situation, which changes practically every hour.
The euro was seen around 0.80% lower, buying $1.1050 US dollars just before closing of the markets in New York.