The US dollar has been strengthening, beginning in the Asian session. In parallel, the euro has been declining together with German yields, despite optimism on Greece and despite good German PMIs that point to stronger growth.
Update: FOMC’s Powell talks about a September liftoff – USD lifts off
After the initial loss of the 1.1290 level, we had a gradual drag lower. The pair is holding above support so far. But, if it is falling on good news, what will happen on bad news? This seems like a bearish sign.
Regarding Greece, the breakthrough that was achieved in talks with the EU could have come at a price: a loss of support at home. It will be hard for Tsipras to pass the agreement within his own party.
Greece is also criticized by the business community: they see it as halting growth and worsening the recession. However, the mere existing of a deal is better than no deal and that is what helped the euro in the first place.
Moving to the US, existing home sales came out better than expected yesterday. We will soon get the all important durable goods orders.
More:
- EURUSD Can Decline Towards 1.1050 – Elliott Wave Analysis
- What Greece Means For EUR/USD – Goldman Sachs
Here is how it looks on the chart: immediate support at 1.1190 works so far. Further support awaits at 1.11 and the really strong support line is at 1.1050.
In our latest podcast we digest the dollar dove dive, update on Greece and preview next week’s events.
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