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Greece remains biggest determinant to EURUSD movement

The market continues to behave as if a resolution to the Greek issue is imminent and it would seem that investors remain confident that a Grexit is not going to happen. Despite the lack of an agreement to the extension of the existing bailout, EURUSD has held up relatively firmly and other risk assets such as equity indices remain near their all time highs. For the Eurozone as a whole, the economic outlook doesn’t look all that bad with business, confidence and manufacturing surveys remaining relatively robust. Today sees a raft of manufacturing data from the Eurozone which is expected to rise with the French, German and Europe wide PMI figure due post an increase. The wider Greece picture however is more likely to determine how EURUSD will move today.

GBPUSD also continues to defy gravity as recent UK data has allowed cable to breakout of its medium term downward trend. Trading at 1.5430 at the time of writing retail sales data this morning will be watched. This week the data for the UK has been sterling supportive, even if the headline inflation figure fell to its lowest level on record, the core number rose more than forecast and average earnings were impressive. Later in the day the US manufacturing PMI number should be monitored as a better than expected figure could lend the dollar a hand.

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