FXStreet (Bali) – According to Valeria Bednarik, Chief Analyst at FXStreet, EUR/USD upside will likely remain limited on Monday, with scope to decline down to the 1.0860 during European hours.
Key Quotes
“Given the overwhelming amount and implications of the weekend news on Greece, large gaps are seen across the board at the weekly opening, particularly in EUR and JPY pairs.”
“On Friday, there was a breakout in negotiations between the troubled country and its European counterparts, and PM Alexis Tsipras announced it will call for a referendum on July 5th, on whether Greece should accept austerity demands from international lenders.”
“Furthermore, the ECB announced on Sunday that will keep the emergency liquidity assistance limited to the country, at around €90B, the level decided last Friday. The measure however, was not enough, as Greece ordered its bank to shut Monday, to avoid a financial collapse. The local exchange market, will also remain closed.”
“The EUR/USD traded as low as 1.0990 early interbank trading, and kick-started the week barely above the 1.1000 level, and with the technical picture distorted amid the over 100 pips downward gap.”
“The strong downward momentum however, may well extend on a break below 1.0995, the 100 DMA, fueling the decline and preventing the pair from filling the gap any time soon.”
“For the upcoming hours, the immediate resistance will be around 1.1050, followed by 1.1120, both strong static resistance levels. Nevertheless, the upside will likely remain limited, with scope to decline down to the 1.0860 region during European hours, before the bleeding finally stops.”
(Market News Provided by FXstreet)