Talks between Greece and its creditors are seeing progress but an agreement seems illusive as the June 5th deadline looms large.
How will this end for EUR/USD? The team at SocGen weighs in:
Here is their view, courtesy of eFXnews:
If Greek debt talks are going to meet all their cliché-requirements by ‘going down to the wire’ before ‘the can is kicked down the path’, the next few days are crucial, says SocGen.
“Reaching agreement before the last possible moment would be atypical of the way this story has unfoldedbut even if we do get ‘a deal’, execution won’t be smooth,” SocGen warns.
“With the Euro bouncing a bit on optimism since yesterday morning, month-end flows are probably supportive and the market is still short Euros. The 9-day RSI bounced off support just as it did in mid-April, and the very short-term has a possibility of the recovery going further,” SocGen notes.
“But relative rate trends are pointing firmly lower as the US yield curve flattens and it’s only a matter of time before the downtrend resumes,” SocGen projects.
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