EUR/USD slips below 1.1000, Greece in focus

FXStreet (Mumbai) - The EUR/USD pair snapped its side-trend from Asia and fell in to losses in the early European trades, largely as the European currency remains pressured versus the greenback ahead of a Greece parliament vote today on the bailout deal amid a data-quiet EUR calendar.

EUR/USD drops from 1.1007

The EUR/USD pair trades -0.17% lower at fresh session lows of 1.0987, retracing below 1.10 handle. The shared currency came under renewed selling pressure against the US dollar as the European traders sold-off the euro as nervousness prevails ahead of the key Greece vote.

Market remains concerned whether the country's parliament will pass reforms demanded by creditors.
Speculations are also doing rounds that the nation is facing a political crisis that may lead to another snap election as the popularity of Syriza's leader Alexis Tsipras has been waning as he agreed to adopt tough measures in exchange for receiving a third bailout package, despite having promised to end the austerity.

Meanwhile, markets keep an eye on developments surrounding Greece while upcoming Euro group meetings will also remain in focus.

EUR/USD Technical Levels

The pair has an immediate resistance at 1.1052 (July 7 High) levels, above which gains could be extended to 1.1095 (July 6 High) levels. On the flip side, support is seen at 1.0967 (Today’s Low) below which it could extend losses to 1.0917 (July 7 Low) levels.

Jul 15, 2015

Negative terms-of-trade shock to open doors for more RBNZ rate cuts - Nomura Research Team at Nomura believes that a big negative terms-of-trade shock. This will lead to weaker growth and inflation prompting RBNZ for further monetary policy easing. Key Quotes: “As a result of falling commodity prices, especially dairy, New Zealand’s economy is facing a big negative terms-of-trade shock. This will lead to weaker growth and inflation.“ “The Reserve Bank of New Zealand (RBNZ) has already reacted to this negative shock by cutting its policy rate by 25bp at June’s meeting.” “With dairy prices expected to continue to fall, as supply continues to grow, we expect the central bank to cut again in July and again before the end of the year, with the timing dependent on the speed of the expected deterioration in the terms of trade.” “ As a result of the continued decline in the terms of trade and further monetary easing, we expect NZD to continue to depreciate. “ “We estimate that the decline in the terms of trade so far this year represent a fall of about 2.2% of nominal GDP.” “This reduction in growth and the weaker NZD resulting from the decline in the terms of trade will also have some impact on inflation. In the short term, this impact is likely to push inflation higher because of the pass-through effect on tradable inflation.”

Research Team at Nomura believes that a big negative terms-of-trade shock. This will lead to weaker growth and inflation prompting RBNZ for further monetary policy easing.

GBP/USD supported by 38.2% Fib level ahead of UK data

The GBP/USD pair is being supported by 1.5640 (38.2% Fib R of June rally) ahead of the data in the UK, which could show average hourly earnings rose at a faster rate in June.