Greece became the first developed nation to miss a debt payment to the IMF, leading to technical default following its failure on Tuesday to secure a temporary extension of its bailout program. The Greek government had asked its creditors for a new two-year program of additional funding and debt restructuring, but it was rejected by Eurozone finance ministers hours before the IMF deadline expired.The IMF said that Greece is now in arrears and can only receive more financing once the arrears are cleared. Regarding Greece’s request for an extension of the repayment, the IMF said that its board will consider it “in due course.” However, despite the worsening stand-off, there are still hopes of some sort of an agreement being reached between Eurozone leaders and Greece before Sunday’s referendum, as behind the scenes efforts continue. The Eurogroup will meet again on Wednesday to discuss Greece’s latest proposals. The European Central Bank is also expected to convene, and it’s possible the ECB will raise the collateral required for emergency lending for Greek banks.The euro remained relatively stable, despite the failure of a last-minute deal to avert a default. The single currency was down slightly in Asian session to 1.1128 against the dollar. It was also down against the pound at 0.7085, but moved higher against the yen at 136.47.In Asia, shares were unmoved by the latest events with Greece and were in positive territory. Chinese shares were the exception, and the main Shanghai Composite index was down around 2% in late trading, as Beijing’s recent efforts to aid the economy subsided.Technical Analysis – EUR/USD neutral with support from Ichimoku cloudThe intra-day bias for EUR/USD has turned bearish after opening lower on Wednesday. Looking at the daily chart, prices are below the tenkan-sen line. Immediate support is provided by the kijun-sen line and the Ichimoku cloud. RSI is below 50 and this supports the downside bias. A strong move back into the cloud could see prices target the low of 1.0953. To the upside, a decisive move above the tenkan-sen line could push prices towards the June 18th high of 1.1435.In the bigger picture, the market has no trend since the end of April, and is likely to remain neutral unless prices break below the low of 1.0461 to resume the prior downtrend. Alternatively, a break out of the upper range above 1.1466 would shift the bias to the upside, and we could see a reversal of the trend.
EUR/USD Daily Chart