Greek Payment Delay Weighing on EURUSD

Greek Payment Delay Weighing on EURUSD

• EURUSD trimmed most of its gains as Greece announced that it will not be paying today’s €300m deadline for its payment to the IMF.
• German Factory orders released by the Deutsche Bundesbank posted an increase of 1.4% in April 2015, compared with the forecast of 0.5%.
• EURUSD moved lower during the European session to trade near 1.1200 where it found support.

German Factory Orders
Earlier during the London session, the German Factory orders, which is an indicator that includes shipments, inventories, and new and unfilled orders were released by the Deutsche Bundesbank. The forecast was lined up for an increase of 0.5% in April 2015, compared to the preceding month. However, the outcome was impressive, as the German Factory orders rose by 1.5%. Furthermore, the last reading was revised up from 0.9% top 1.1%.
In terms of the yearly change, the non-seasonally adjusted German Factory orders increased by 0.4%, which was a lot lower compared with the last revised reading of 2%.

Deutsche Bundesbank’s Projections
There was a report published by the Deutsche Bundesbank today, in which the bank mentioned that German economy showed an upward trend. Commenting on the same the President of the Deutsche Bundesbank, Jens Weidmann stated that “Domestic economic activity is benefitting from the favorable labor market situation and the substantial income increases”.

The most important point to note is that the Bundesbank’s economists expect Germany’s real gross domestic product (GDP) to increase by 1.7% this year.

Greek Concerns and EURUSD Reaction
EURUSD was down during the European session as Greek debt worries persist. The pair was lower by around 50 pips to trade near 1.1180. It later found support after the better-than-expected German Factory orders report. The pair is now back above 1.1240, and approaching towards 1.1280, which is a resistance area.
On the downside, the 1.1200-20 area might act as a support for EURUSD. Today, the US NFP report could cause swing moves and ignite a break in EURUSD moving ahead.