FXStreet (Guatemala) – EUR/USD is volatile post the Greek referendum and NO vote, currently trading at 1.1020 with a high of 1.1042 and a low of 1.0969 still as we open Tokyo.
EUR/USD opened on a wide bearish gap post the results of the Greek referendum and has been volatile since.
EUR/USD price action
EUR/USD gapped lower from 1.1115 Friday’s close down to aforementioned lows and stablised there for the best part of early Asia until the electronic markets opened. The single currency staged a significant recovery back on to the 1.10 handle and scored 56 pips on the rally within a 30 min stick and then steadied. Just prior to the open in Tokyo, traders pressured the currency lower again below the 1.10 handle only to find demand at 1.0991 until 1.1026/35 resistance level.
EUR/USD fundamentals
EUR/USD has been a tricky play over the Greek debacle and often doing the opposite of what might expect given the implications of a Grexit. However, fundamentals do indeed weigh on the downside in the major although there are plenty of variables left in the mix to be cautious of, from Central Bank interventions to out right political turmoil and subsequent ramifications.
We are now stuck in unpredictable waters. The Strategy/Economic Team at TDS analyzes what is needed to move forward the Greek situation and said, “The Greek Government must say what it wants.”
The results of the Greek referendum were a resounding 61.3% voting “No” to the Eurozone creditor’s stringent conditions for a deal. This may offer Tsipras further clout at the negotiating table but there are growing concerns of a Grexit whith some Eurozone officials, such as Germany’s economic minister, seeing it as Tsipras leading Greece down the path of hopelessness.
Meanwhile, a European summit has been confirmed to take place on July 7th while some heads, such as Merkel and French president, Hollande, are more sympathetic to the public of Greece’s decision. Greek Finance Minister Yanis Varoufakis, when responding to the Greek referendum, has called it, “a big yes to a democratic Europe”.
EUR/USD technically
The cloud base comes as first major support at 1.0994 although was already tested and taken out on today’s lows so far. 1.0820 guards 1.0520 ahead of 1.0469 2015 lows last traded since 2003 and then parity. Separately, analysts at JP Morgan have said, ‘Grexit’ worth 5 to 10 cents of maximum downside.’ On any upside, through 1.1120, the next major resistance is at 1.1280/1.1325 and through there we enter in to a congestion zone at 1.1440/1.1534, the recent highs.
(Market News Provided by FXstreet)