EURUSD made impressive gains last week, provoked by big hopes for resolution of the Greek crisis. After breaking back to the previous bullish channel, will the pair jump above 1.30? The critical Eurogroup meeting today holds the key, and later on, data on inflation and employment are some of the highlights on the Forex market.
The dollar rose today before the meeting, dealing with the debt problems in Greece. Meanwhile, the yen continues to decline. The U.S. dollar and the euro are expected to rise against the yen this week, as the data on retail sales in the U.S. will surely be strong after Thanksgiving Day.
Disagreements between the IMF and Eurogroup on Greece’s long-term goals, sent the parties back to the drawing board, but they seem to plan something. EURUSD has already recognized the transaction. However, it is important to note that the last part of the rally was supported by the positive news from Germany – the rising business confidence. Will Europe work together at the end or this is just a temporary optimism? After the previous session failed, there are high hopes that a magic solution would be found to put the IMF on Greece debt trajectory until it forces the Eurozone governments to take losses. „Greek salad” of lower interest rates, redistribution of profits of the ECB, and the program of redemption of debt are the main ingredients that are considered. Greg Anderson, a currency analyst at Citigroup says that final agreement for Greece will give the opportunity for growth in EURUSD to 1.30. If not, then the pair could remain in the range of 1.27 to 1.29.
Another important event of the Forex market today were the German consumer sentiments of GfK: Monday 11:00 pm.
Update for November of this indicator of consumer impulse probably will not increase much. But keeping steadily, it managed to retain the charm of the latest leading economy in Europe, while its neighbors are struggling with new recession. So far, so good. Last week, the relatively optimistic news for GDP in the third quarter and business sentiment in Germany (study IFO) laid foundations of positive thinking. Update on the consumer climate today can prove this.
Consumer confidence in Germany was revised to its highest level since 2007 in October, reaching 6.3 of the upward revision 6.1 in the previous month. This leap occurred after the increased optimism about economic expectations. Domestic consumption may be the only factor to prevent Germany from sliding into recession. The same reading is expected now.