By fxtimes.com
Technical Bias: Bearish
Highlights:
- EURUSD plunges to fresh 12-year lows, declining around 140 pips to 1.0715.
- US dollar index climbs to 12-year highs, advancing 0.9% to 98.53.
- Greek bailout talks to resume in Brussels on Wednesday.
The EURUSD declined around 140 pips on Tuesday, as the markets awaited a resolution concerning the ongoing Greek bailout crisis, while the US dollar continued to appreciate across the board.
The EURUSD declined 1.3 percent to 1.0715, a fresh 12-year low. With Tuesday’s loss, the euro has declined for five consecutive days against the dollar, plunging 4.1 percent over that period. The pair faces near-term support at 1.0717 and resistance at 1.1094.
The US dollar index continued to push toward 100, climbing 0.9 percent to 98.53, a fresh 12-year high. Analysts say the dollar rally still has a ways to go, as weak commodity prices and the prospect of a Federal Reserve rate adjustment continue to prop up the world’s most actively traded currency.
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Concerns over Greece’s ongoing bailout talks continued to weigh on the euro, as the markets awaited a round of “technical” negotiations between Greece and its creditors on Wednesday. Greece and its Eurozone partners are struggling to strike a resolution to keep Athens funded over the next four months after reaching a tentative agreement in February to extend emergency aid until June. Talks broke down on Monday, testing the patience of Eurozone member-states.
“We only have four months,” Dutch finance minister and Eurogroup president Jeroen Dijsselbloem said on Monday.
The Greek government remains committed to fighting what it calls cruel austerity. Greek finance minister Yanis Varoufakis said his government would consider holding a referendum on government policy should Eurozone members fail to pass Athens’ bailout reforms. Those reforms were rejected last week by Dijsselbloem, who said the proposed plan wasn’t enough to unlock Greece’s next loan instalment, valued at €7.2 billion.
Greek defense minister Panos Kammenos upped the rhetoric on Tuesday, warning Europe of a wave of economic migrants, including “some jihadists,” should a resolution to the ongoing crisis not be reached.
“If Europe leaves us in the crisis, we will flood it with migrants, and it will be even worse for Berlin if in that wave of millions of economic migrants there will be some jihadists of the Islamic State, too,” he said.
Article by fxtimes.com
