EUR/USD: make correction on Greece
Next week will be rather light on the economic data from the euro area. On Monday French, German & Italian banks will be still closed because of the Easter holidays. Then there will be some releases of medium importance like Spanish unemployment change, euro zone’s retail sales and German factory orders.
In addition, the negotiations between Greece and its creditors about the latest reform plan will resume in Athens. Although the nation has presented new proposals on April 1, people with knowledge about the matter say that there are still great differences between the two parties. There’s a big risk that the decision about disbursing Greece the final tranche of the bailout money won’t come before the Eurogroup’s meeting on April 24. The lack of agreement will be a source of pressure on the euro.
Meanwhile, Greece is in desperate need of these funds: without it the country will go bankrupt and may be forced to exit the euro area. Prime Minister Alexis Tsypras will visit Russia on April 8 to meet President Vladimir Putin. Earlier Tsypras planned to go in May, but as the talks with Germany weren’t very successful, he decided to reschedule. Although most top Greek government officials have rejected the idea of seeking financial aid in Russia, the visit will be regarded as Greece’s attempt to assess such possibility.
The next day, on April 9, the nation has to make a debt repayment to the International Monetary Fund. According to Greek officials, they will then run out of cash.
Weak US NFP has brought some strength to EUR/USD bulls. The pair will now be much better supported, though Greece and the ECB’s easing will act as constraining factors. Resistance is at 1.1050, 1.1215 and 1.1315. The biggest obstacle is at 1.1530. Support lies at 1.0800.