Euro under immense pressure on renewed Greek woes
Investors will continue to watch carefully the latest updates from Greece as it must repay four loan installments totaling 1.6 billion euros to the IMF this month, while its bailout package backed by the euro area expires at the end of June.
The government in Athens failed to reach an accord with its creditors before the deadline it set on Sunday.
“If we have not reached an agreement with our partners, it’s not because of our intransigence or incomprehensible positions from the Greek side,” Greek Prime Minister Alexis Tsipras told French daily Le Monde on Sunday.
In case Greece has failed to reach an agreement, there may be a need for a political intervention, like holding a referendum on the reforms requested by European officials to release an aid disbursement of 7.2 billion euros.
European Commission President Jean-Claude Juncker has signaled a Greek exit from the euro region would damage confidence in the euro, and may spark a foreign capital flight out of Europe.
However, some Greek officials have expressed their confidence a deal would be reached within couple of days.
Following a two straight weekly losses, the euro may find some support if Greece reaches an accord with its creditors.
Data released from the euro area on Monday showed the final PMI manufacturing received a slight downside revision to 52.2 in May from the flash reading of 52.3.
Later in the week, eyes will track euro area CPI flash estimate for May and the ECB monetary policy meeting.
As of 08:31 GMT, the euro trade around 1.0907 compared to the session’s opening at 1.0978.
By looking at the four-hour chart for the EURUSD pair, it appears that the bearish direction is predominate after the fall below the support line.
The pair also trades below both SMA 7 and SMA 15, while the RSI 14 momentum indicator tumbled below the 50-center line.
This week’s pivot point is depicted at 1.0937, where the pair may fluctuate between key support at 1.0557 and key resistance at 1.1317.