The EU Summit resulted in a decision of a new deadline: Sunday, July 12th. Until then, Greece needs to secure a deal for the short term, in order to open the banks, and for the long term, in order to allow it to grow. Otherwise, the chances of a Grexit are extremely high.
EUR/USD has emerged from the lows in a mix of some optimism and a correction after the fall. Here is the latest.
Developments
Before the Summit
- The group of euro-zone finance ministers convened for the first time with the new Greek finance minister Euclidis Tsakalatos
- No new proposal were brought to the table.
- Greek PM Alexis Tsipras met with German Chancellor Angela Merkel and French President Francçios Hollande.
- Merkel stated that there is no basis for negotiations at the moment.
- Italian PM Renzi said “a deal could be reached within hours†and that helped the euro.
Summit Decisions
- In the summit of euro-zone states, A new, tight timetable was decided upon.
- The Eurogroup will receive new Greek proposals today, Wednesday, July 8th.
- A full program is expected from Greece until Friday at 6:30 GMT.
- The Eurogroup will meet on Saturday.
- A full European Union Summit, including all 28Â members will attempt to agree on a new deal for Greece.
Key comments:
- EC President Juncker mentioned that the a full plan for a Grexit has been prepared, even though Greece talked about going to court upon an attempt to kick it out of the euro-zone.
- Merkel said she is not optimistic.
- Moscovici remains optimistic for a deal, but says the ball is in Greece’s court.
- Tsipras remains optimistic. He will address the European Parliament shortly.
More: ECB has its fingers on the Grexit trigger – will it pull it?
EUR/USD movements
After opening with yet another weekend gap and closing it, EUR/USD fell to new lows yesterday, at 1.0915. This was partly fueled by optimism that came from Renzi and some selling of dollars, after a big rally beforehand.
1.1050 is weak resistance, followed by 1.1130. 1.10 is a pivotal point. 1.0915 emerges as the first line of support, followed by 1.0820.
More: Short EUR/USD Remains Our Flagship Trade – Here Is Why – Barclays
And here is how it looks on the chart:
