The dollar rallied in the Asian trading session versus the euro only to see those gains dissipate during European trading as no news from Greece is good news from Greece.
At the market’s open the greenback was trading stronger but as expectations improved for a positive outcome in Greece’s austerity vote on Wed the euro received a small bid. Currently in Greece the majority the PASOK party maintains in the Greek parliament will allow for the passage of the legislation the unity within the party is fading as some deputies consider not voting in favor for the upcoming medium-term fiscal plan. Approval of the plan is a requirement for Greece to receive the next tranche of funds from the EU/IMF. Sentiment could begin to deteriorate should further setbacks take place as the key vote nears. Near-term support for the EUR/USD comes in at 1.4070 followed by the May low at 1.3970. While market sentiment appears to be against the euro, any upside to the EUR/USD could be held near 1.4360 at the upper boundary of the current consolidation pattern.
The yen hit its lowest level versus the dollar in one week as the broad dollar rally continues. Moody’s comments’ on the failure of the Japanese government to follow up on its promise to announce a long-term fiscal plan by June 20th also contributed to overall yen weakness today. This is a negative for the yen as the event, “does not anchor government finances”, and leaves open the possibility of an increased national debt. Following the announcement the USD/JPY climbed as high as 80.87, though any further advances may be capped at the 81 resistance while the downside appears to be based at 80 yen.
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