EUR/USD crashes to 1.10 on Greek capital controls

FXStreet (Mumbai) – The shared currency was heavily sold-off versus the US dollar in early Asia, knocking-off EUR/USD to fresh four week lows near 1.10 handle. The European currency tumbled largely driven by Greek uncertainties as markets are wary over Greece’s future in Euro zone after the Greek government rejected Euro group proposal over the weekend before June 30 deadline.

EUR/USD drops to 1.0955

The EUR/USD pair trades -1.40% lower at 1.1006, dropping sharply from Friday’s close of 1.1129 levels. The major was relentlessly offered in Asia, dropping nearly 150 pips weighed by impending Greek debt situation after Greek Prime Minister Alexis Tsipras decided to hold a referendum on accepting austerity measures set out by the nations creditors.

The EUR/USD pair came under renewed selling pressure after Greek officials confirmed capital controls imposed as the government tries to contain a bank run following heavy withdrawals last week.

Greece is due to repay €1.6 billion to the IMF on June 30, however, Greece currently has no means of paying the debt unless an extension to its bailout funds are agreed upon. Greek PM Tsipras has called for a referendum. The referendum on whether or not Greece should accept austerity measures will be held on July 5.

According to Chris Capre, Founder at 2ndSkies, “Everything depends upon a Greek deal at this moment. Just the fact none is in play yet (before June 30th deadline) is already causing this kind of risk premium to the bear side. A full blown no deal by June 30th and default would easily dice into this box/zone of support, and likely more. The bottom of this key level/blue box is around 1.0824. Breaking below this sets up 1.0675 and 1.0540.”

Looking ahead, Greece headlines remains in the spotlight, while the macro calendar remains fairly light with German CPI – the only significant data to be reported.

EUR/USD Technical Levels

The pair has an immediate resistance at 1.1033 (Today’s High) levels, above which gains could be extended to 1.1100 levels. On the flip side, support is seen at 1.0955 (Today’s Low) below which it could extend losses to 1.0913 (June 2 Low) levels.

The shared currency was heavily sold-off versus the US dollar in early Asia, knocking-off EUR/USD to fresh four week lows near 1.10 handle. The European currency tumbled largely driven by Greek uncertainties as markets are wary over Greece’s future in Euro zone after the Greek government rejected Euro group proposal over the weekend before June 30 deadline.

(Market News Provided by FXstreet)