Euro receives support as the economy seems to be getting back on track

EURUSD returned to the 1.1200 area after testing the 1.1080 support zone. Greece’s situation is still unclear as talks have not materialized and the European Commission cut its forecast for Greek gross domestic product in 2015 to 0.5% from a previous estimate of 2.5%. The EUR has received strong support from the idea that Greece may benefit from a controlled default or, the most favorable scenario, a debt restructuring situation.

In addition, the euro had received a vote of confidence as Spain’s national statistics office registered a fall of 2.7% , last month from March, in the number of persons registering as jobless. The unemployment in Germany also fell in April to its lowest level in 24 years, while the euro zone emerged last month from four months of deflation. On the short term, the EURUSD tendency may keep rising while on the long term the trend is still descending.

Capital markets in both the European and American areas lost momentum as Greece puts doubts over paying European creditors and the string of weak data from the US economy continued by the publishing of the Trade Balance down to -5.4 billion, the Final Services PMI fell to 57.4 points and the IBD/TIPP Economic Optimism also decreased to 49.7 points.

The price of WTI oil reached the 60 dollars per barrel level for the first time this year, a fact that may seriously disturb the old descending trend, while rumors suggest that the OPEC meeting in June won’t bring changes in the oil output. Recently the quotation received an impulse after protests cut supply lines to the eastern Libyan oil port of Zueitina. The recent upsurge of the price may continue for a while if American inventories due to be published today will fall below the last report.

The Reserve Bank of Australia decided to cut the interest rate to 2%, joining the dovish international tendency. AUDUSD had an initial decreasing episode, but briefly rose towards the local resistance level at 0.7950. A breakout of this zone may encourage a new rally while a rebound may send the price down to 0.7900 and later to the 0.7800. This decision was broadly anticipated by market participants. The RBA also suggested that the depreciation trend of the Australian dollar is “likely and necessarily” to continue.