After the newspaper Bild reported that Germany is making preparations for a default and the IMF delegation left Brussels during the negotiations last week, an official (French, apparently) had stated that the last attempt to reach an agreement failed, according to sources taken over by Dow Jones. On Saturday, the Greek negotiations proved to fail in reaching an agreement with Troika. It looks like the Athens doesn’t want to agree with more pension and wage cuts, while the EU’s executive Commission, apparently irritated, said that the euro zone finance ministers would not approach the issue when they meet on Thursday.
On an hourly chart, EURUSD betray a descendant channel line, while the negative gap marked hours ago hampers the technical positive route. On a bigger timeframe, the trend is still upwards, while the 1.1200 support level might break, freeing the way to 1.1100. On the other side, the American dollar feels the tension of the Fed’s meeting on Wednesday. Traders will search for any signal on when the central bank will make its first interest rate hike in nearly a decade, while the interest rate is expected to be left unchanged on Wednesday. For the long term, a positive scenario for EURUSD, which is difficult to be trusted, would be active if the price rise above the 1.1300 resistance level. On the short term, a breakout of 1.1231 could help covering the gap up to 1.1247 – 1.1276.
On Friday, the American dollar was helped by the positive data released on the PPI, which increased 0.5%, the core PPI advanced in line with expectations by 0.1%, while the preliminary University of Michigan Consumer Sentiment rose to 94.6 points.
The USDCAD currency pair price decreased for a few days last week as the prices of oil were still rising and the US dollar was week, but recently the tendency reversed as the Canadian dollar got weaker along with the new descending episode of the oil quotations. The Canadian Manufacturing Sales index is due to be published today, and if the pessimistic estimates are met (-1.3%), the quotation may break the 1.2350 strong resistance and advance up to 1.2382 and 1.2410.
The oil quotations are decreasing as the oversupply phenomenon is pressuring the prices. The Arab leaders, especially Saudi Arabia’s officials, assured the markets that they were ready to increase production above record levels to meet strong demand, if needed. Yet, the WTI quotations may develop a correction of the descending tendency as a storm could impact Gulf of Mexico operations. In the short term, we may see the oil quotations covering the negative gaps, while in the medium term the descending trend stays in place.
