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There are reports that the troika and Greece have reached a compromise deal. If these reports are true, Greece would get the next tranche of aid, and avoid running out of cash in mid November.

Apart from the necessary caution, there are also reports about fresh German demands. EUR/USD is cautiously rising.

EUR/USD is now trading at 1.2980, rising from the pit it fell into after German data came out worse than expected.

EUR USD Recovers on Greek Deal October 24 2012
EUR USD Recovers on Greek Deal – Click to enlarge

The main details of the deal consist of an extension of two more years to reach a primary surplus – a compromise that was widely expected. the primary surplus that is expected is 4.5% of GDP. Greece will enact reforms, including a rise of the retirement age from 65 to 67.

However, the aforementioned primary surplus might end up in… Germany. The euro-zone’s locmotive suggests that Greece will pay its surplus into an escrow account. This could be a sticking point.

Some more concrete data is needed to recapture the 1.30 line. For more lines, see the EURUSD forecast.