The relatively positive outcome of the Eurogroup meeting of Finance Ministers provided some support but failed to lift the single currency much, as it continued to trade below the 1.12 mark against the US dollar. Eurozone Finance Ministers acknowledged that progress had been made during the negotiations with Greece, but said that more had to be done. Greece also repaid 750 million euros it owed to the IMF a day earlier than the deadline.On the negative side, despite the more positive atmosphere in yesterday’s Eurogroup meeting compared to the acrimonious exchanges during the one at the end of April, Greece has apparently failed to receive more favorable treatment in terms of additional ECB funding for Treasury Bills (a key Greek demand) or additional aid. Therefore, the clock is still ticking down and a deal will need to be struck or Greece could default in the next month or so.The one currency that did shine was the British pound, as it found a lot of favor post-election. The pound pushed the euro all the way down to 0.7140 – a near 2-week low, while it pushed above 1.56 versus the dollar at some point; a new high year-to-date. Tomorrow will be absolutely crucial for the pound, as the Bank of England will issue its quarterly update on its medium-term outlook for growth and inflation, while Mark Carney is expected to convey the bank’s latest views during the press conference that will follow the report’s publication.EUR/GBP bearish in lower Bollinger Band EUR/GBP fell below its 20-day moving average on Monday to a low of 0.7140. The downside bias remains strong after the pair failed to close above the upper Bollinger band and fell back after peaking at 0.7482 last Thursday. The RSI is back in bearish territory with a reading below 50, which also highlights the downside bias. There is scope to test the March 11 low of 0.7013 especially if there is a break of immediate support at 0.7116 (April 23 low). To the upside, the market will likely be capped by the 20-day moving average but a break above it and above 0.7256 will weaken the downside bias.
EUR/GBP Daily Chart