EUR/USD makes second move higher on fresh Greek optimism

After clouds darkened in  Brussels and it seemed that the Greek proposals never made it on time to the meeting, there is fresh optimism, as there had already been during the weekend and early in the day. It  can be drawn from the absence of the  loudest voices, those of Lagarde and Varoufakis from the scene. And it can also be drawn from the optimism heard from other players.

EUR/USD is above the previous double top of 1.1375 and getting closer to 1.14. Here are some updates:

• Juncker says he expects a deal soon
• The Eurogroup sees the Greek proposal as a positive step.
• Stathakis says Greece is rescued.
• Outspoken Greek finance minister Yanis Varoufakis did not comment – in the past he managed to anger his colleagues.
• IMF MD Christine Lagarde did not talk – the IMF is usually the biggest hurdle within the institutions (formerly the troika) and  Lagarde, like Varoufakis, is very blunt, to say the least.
• ECB  has raised emergency liquidity assistance (ELA) to banks for a third time in 5 days, and will also convene tomorrow to further enlarge it – the ECB isn’t an obstacle in the negotiations.
• ECB president Mario Draghi and Greek PM Alexis Tsipras meet at 16:00 GMT.
• Contrary to previous rumors, the Leaders’ Summit is NOT cancelled – the heads of state do meet at 17:00 GMT.
• The Athens stock market  closed 9% higher, with  bank shares at +20%. Also the  German DAX close nearly 4% higher and other European markets were also on a roll.This reflects the optimism.

Who wins and who loses with the new Greek proposals? While Greece made some concessions, it seems there are no cuts to what pensioners get.

More:

• EUR/USD: Fade Rally On Any Greek Resolution – BNPP
• Why Greece currently has leverage over all troika members

The recovery high of 1.1460 is critical resistance, and it’s followed by the  round level of 1.15. On the downside, 1.1375 still  plays a role, followed by 1.1340 and by strong support at 1.1290.

Here is how it looks on the chart:

In our latest podcast we digest the dollar dove dive, update on Greece and preview next week’s events.

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