Euro drops vs. pound as Greece talks reach a stalemate

Euro drops vs. pound as Greece talks reach a stalemateThe euro retreated for a third straight session against the British pound on worries Greece would bankruptcy at the end of this month after negotiations with creditors reached a stalemate.

The International Monetary Fund said its team had quitted talks in Brussels after they failed to reach a compromise deal with Athens regarding labor reforms.

Donald Tusk, the European Council president, has accused the Greek government of gambling and revealed the time for compromise deal is over.

The euro came under pressure on Wednesday after Standard & Poor’s rating agency downgraded Greek bonds deeper into junk status.

However, the ECB decided on Wednesday to raise the limit Greek banks can borrow from the ECB to €83 billion instead of €80.7 billion, according to a Greek bank official, to avert withdrawals from depositors.

German 10-year bond yields dropped to 0.891 percent on Thursday, following its climb yesterday to a 9-month high when it surpassed 1 percent.

EURGBP

The EURGBP slipped after the breach of the support line depicted on the four-hour chart, yet it found some support to trade around 0.7256.

The Parabolic SAR is still giving bearish signs, which may support the downside direction, where the RSI momentum indicator is moving below the 50 line.

The previously breached support, which now has turned into resistance, will probably any rebound attempts.

In case the pair resumed its drop, it will probably find support at 0.7237.

EURGBP fxcomment

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Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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