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It seemed that the sides were getting closer and closer to a deal, even if such a deal would not be reached in the Eurogroup meetings held today.

However, reports are emerging that both Greece and Germany are working separately on Plan B. EUR/USD is reacting and falling  to lower ground. The headlines, brought below come from both sides and don’t look good, but they could also be misleading.

Dark clouds

A report from the  somewhat sensational Ambrose Evans-Pritchard in the Telegraph (with highlights here) says that Greece’s “war cabinet” decided to defy the European creditor powers – not accept  further compromises but rather toughen its stance in the negotiations.

In Germany, pressure is  mounting on Chancellor Angela Merkel to let go of Greece.  Proponents in her party claim that such a move would strengthen the euro and would also help Greece’s economy via devaluation.

There are also reports that Greece would only pay its  few private bondholders, or also the  European countries but not the IMF. There is a lot of information and disinformation coming out.

And everybody knows that Greece is running out of money. Each  repayment is becoming a more complicated task, and so are monthly salary and pension payments.

Darkest before dawn?

But, circling back to the initial note, the reports from last week on progress being made, one must reconsider all these reports.

Are these frightening headlines from both sides just attempts to put pressure on each other towards an agreement?

I don’t have a clear answer on that.

But we can certainly see the markets reacting: EUR/USD fell from 1.12, extending the falls on the NFP and has reached a low of 1.1132. At the time of writing, the pair is at 1.1150.

Another certainty is that these reports create low  expectations for the Eurogroup meeting: anything except a total failure of the talks in Brussels could boost the euro: low expectations create positive surprises.

More:  Here is Where To Sell EUR/USD Rally –  MS

Here is how it looks on the chart:

EURUSD down on Greek crisis May 11 2015 technical 30 minute chart