Traders are still fully focused on Greece and any rumour out of this situation is making a headline and some of them are denied afterwards by the Greek officials by confirming that such rumours have no leg to stand. A perfect example of this took place yesterday, when there was a news that Greece has approached the IMF and has requested for more time, but then such rumour was denied by the Greek finance minister. Although, there is no disagreement that frictions have anchored towards their peak between Greece and the EU, and it is difficult to see for the time being how both sides will agree on any joint agenda given that, the German finance minister has delivered his strongest statement by saying that both sides have no clue on this.
The intriguing affair is that time is not on Greece side, as with every minute passing, it is raising more questions about the Greek government’s ability to strike any deal, but then history teaches us one affair for certain that such agreements are only agreed at the very last minute and there is strong possibility that a similar outcome could could take place in this situation once again. Yes, the prime minister of Greece is optimistic in his approach and has tried yesterday to calm the market nerves by saying that sturdy performance has been made and both sides have agreed on many issues, however the thorny issues are still hindering their way to reach the final destination.
As for the euro currency, short squeeze is the name of the game and traders are pushed to book some profit off from the most crowded trade -EUR/USD. Given the drop we experienced last week for the pair, it was highly likely that such a move could take place as we pointed out in our analysis during early this week. So, the question which traders are asking is should they consider this as an opportunity to short the euro or shall they join the rally, given that the pair was unable to break below the 1.05 level and the support of 1.488 still holds. Once again, it boils down to what time frame you have in your game plane, because if you are a scalper or a short term traders who is looking to make a promised return on volatile move then yes, there is still some potential of 2-3% for an upward move, but if you are a longer investor and looking over a bigger timeframe, then perhaps this may be another opportunity for you to jump on this wagon and join the EUR/USD short trade.