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Forex - EUR/USD slips lower on Greece worries

Published 05/21/2012, 02:36 AM
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Investing.com - The euro was slightly lower against the U.S. dollar on Monday, after a pledge of support for keeping Greece in the euro zone following a weekend summit of G8 leaders failed to offer significant support to the shared currency.

EUR/USD hit 1.2813 during late Asian trade, the pair’s highest since May 15; the pair subsequently consolidated at 1.2767, dipping 0.09%.

The pair was likely to find support at 1.2641, Friday’s low and a four-month low and resistance at 1.2868, the high of May 15.

The leaders of the Group of Eight major economies failed to reach an agreement on how to calm market turmoil stemming from the crisis in the euro zone. However, in a statement leaders indicated that they do want Greece to remain in the euro area and pledged to take measures to bolster their economies.

The euro was also supported after an opinion poll in Greece on Friday indicated that pro-bailout party, New Democracy was leading the polls ahead of fresh elections, due to be held on June 17.

But investors remained wary amid lingering fears over the possibility of a Greek exit from the euro zone and concerns over the health of Spain’s banking sector.

The euro was slightly lower against the pound, with EUR/GBP slipping 0.08% to hit 0.8072, but eased higher against the yen with EUR/JPY rising 0.16% to hit 101.14.

Meanwhile, President of the European Commission José Manuel Barroso said Sunday that the elections in Greece next month would decide the future of the country.

In an interview with The Wall Street Journal, Barroso also said it was important for Greece to honor the terms of its bailout agreement in order to maintain the credibility and stability of the euro area.

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