Rising German business confidence supported the EUR/USD on Friday, outweighing heated negotiations between Greece and the Eurozone at this week’s Eurogroup meetings.
The EUR/USD briefly climbed past the 1.09 handle in Europe before being sent back in the North American session. The EUR/USD consolidated at 1.0854, advancing 0.3%. Daily support is located at 1.0708 and resistance at 1.0949.
The EUR/USD is trading at more than two-week highs. The short-term technical indicators show signs of bullishness, although this could be short lived as the markets react to the deepening debt crisis in Greece.
Greek finance minister Yanis Varoufakis was the recipient of harsh criticism by his Eurozone colleagues at this week’s ministerial meetings in Liga, Latvia. Eurozone finance ministers described Varoufakis as an “amateur,” criticizing his government of complacency in reaching a new bailout agreement. The controversial Greek finance minister appeared more confident that a deal would get done to save Greece from a fiscal disaster.
According to Eurgroup head Jeroen Dijsselbloem, wide differences still exist between Greece and its Eurozone partners.
The EUR/USD was surprisingly resilient amid the negotiations, likely a result of growing business confidence in Germany. The Ifo German business climate index rose to 108.6 in April, its highest level in ten months. German businesses also gave a favourable assessment of the current economic situation, but were slightly less confident about the long-term outlook.
The Ifo business climate index has risen in each of the last six months. Business optimism rose in all three major sectors, including manufacturing, wholesaling and construction, Ifo data showed.
Despite its resilience against the dollar, the euro was muted against the British pound and Japanese yen.
The EUR/GBP declined 0.4% to 0.7161. The pair is likely to find short-term support at 0.7138 and resistance at 0.7223.
The EUR/JPY declined 0.16% to 129.20, although the technical indicators are still bullish. The pair faces near-term support at 128.30 and resistance at 130.13.
The euro was little changed against the Swiss franc, as the EUR/CHF held steady at 1.0334.
Europe’s common currency will face heavy price action next week, as Germany unveils CPI, unemployment and retail sales data. The European Commission will also report on Eurozone CPI in the latter half of the week.