FXStreet (Barcelona) – FX Strategists at TD Securities, suggest fading any EUR/USD gains, and expect the pair to see further downside pressure on a move below 1.0950.
Key Quotes
“US data reports over the past week have been positive; expectations for a firm Q2 GDP rebound are building, as are hopes for an upward revision to the final Q1 GDP data due later in the month. As we feared, however, positive retail sales data failed to lift the USD materially yesterday; the report was solid and details were encouraging but expectations for a high number were well baked in to the market and an on consensus outcome for the headline data could do little other than to boost the USD briefly before it turned lower again.”
“If that is at least understandable, the EUR’s immunity to clear signals from Europe that time is running out for Greece is a little more difficult to explain away—even if the single currency is softer ahead of the weekend. The IMF’s very public departure from talks yesterday is a clear sign that things are not progressing.”
“Press reports suggest that creditors are not prepared to offer any more than what was proposed to Athens last week. But Athens seems to be holding out for a last minute deal. As the EU certainly has “priors” with respect to the 11th hour punt, it’s understandable that markets are not too fazed by developments at this point. There an assumption that a deal will get done.”
“The risk of an unexpected outcome and more volatility for the markets may be rising, however, as neither side appear willing (or able) to blink. We reiterate that, despite USD’s apparent inability to rally on good news earlier this week, Greek uncertainty should mean EURUSD gains are “fade-able” and capped in low/mid 1.13s at most—something that Chancellor Merkel’s EUR-negative comments this morning should reinforce.”
“We expect more obvious and concerted pressure on the EUR if spot moves below 1.0950.“
(Market News Provided by FXstreet)