EUR/USD was watching Greece very carefully with contrasting news causing confusion. The story became more dramatic after markets closed with the announcement of post-deadline referendum. In the last and busy week of H2, we have important inflation numbers and PMIs. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.
The reported breakthrough in the Greek crisis on Monday did not last long as the skies darkened on Wednesday and Thursday. New hopes for a deal on Friday still lacked a few key factors. The euro has been reacting to the headlines, but often falling on good news. One reason is the refocusing on monetary policy divergence, that favors the dollar, and the other is that the common currency has become a funding or even a “safe haven” currency. But, in case of a “Grexit” or a “Grexident”, it is clear that the euro would plunge that is already worrying some brokers. The most recent development was the announcement of a referendum on the rejected proposals. This is planned for after the deadline, assuming that the Eurogroup approves a temporary extension of the deadline, which seems unlikely as of Saturday at noon. Update: the Eurogroup historically decided without Greece to reject the extension.
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