Investing.com -- EUR/USD fell mildly on Tuesday one session after moving sharply higher, as the two sides in Greek debt negotiations reportedly remained far apart on a number of key issues.
EUR/USD inched down 0.0011 or 0.10% on Tuesday to close at 1.1280. In spite of Tuesday's minor downturn, the pair has still remained above 1.10 for the last seven sessions. EUR/USD traded in a tight range of 1.1214 and 1.1344, ahead of Wednesday's key meeting between Greece prime minister Alexis Tsipras and Germany chancellor Angela Merkel in Brussels.
The pair likely gained support at 1.1048, the low on June 4 and was met with resistance at 1.1381, the high on June 5.
Tsipras is reportedly approaching the meeting with a more conciliatory position than prior attempts over the last few weeks in an effort to reach a breakthrough in the slow-moving talks. Following the latest stalemate in tense negotiations, Tsipras has offered to make a series of concessions through raising Value-Added Tax rates and accepting higher budget surplus targets. France president Francois Hollande is also scheduled to attend the meeting.
Earlier, euro zone officials promptly dismissed Greece's latest proposal on tax, debt and budget reforms. Despite initial reports claiming that the two sides were hours from striking a deal late last week, Greece and its international creditors are still not close to reaching an accord after submitting divergent proposals on a cash-for-reforms plan. Greek officials reportedly scrambled on Tuesday to revise their latest proposal that was rejected by leaders of the European Central Bank and European Commission.
Greece's European creditors have pressured the cash-strapped nation to back away from pre-election promises earlier this year to undo massive cuts in pension benefits and other government programs. A previous bailout prior to Tsipras' victory in January forced Greece to slash retirement benefits that comprise approximately 16% of the nation's GDP.
The creditors are hoping to establish substantial penalties for Greek citizens who opt for early-retirement, as well as raise taxes on utilities and basic consumer goods such as medicine. Tsipras has described the proposal as "irrational."
By the end of the month, Greece owes the International Monetary Fund a sum of €1.1 billion after it bundled four separate obligations to the organization late last week into one payment. On Monday, Merkel told reporters at the G7 summit in Germany that Greece is running out of time to reach a deal.
Meanwhile, currency traders continued to digest optimistic U.S. jobs data last week that could increase the possibility that the Federal Reserve will raise interest rates by September. The U.S. Department of Labor said non-farm payrolls increased by 280,000 in May, above expectations for a 220,000 gain. More importantly, average hourly wages surged by 0.3% from the prior month, above forecasts for a 0.1% uptick.
On Monday, Minneapolis Fed president Narayana Kocherlakota announced that he will be stepping down to accept a position as an economics professor at the University of Rochester. The departure of Korcherlakota, a noted Dove on the Fed, could indicate that an interest rate hike might be imminent.
Yields on 10-year government bonds throughout the euro zone continued to spike. Yields on German and French 10-year bonds each rose seven basis points to 0.95% and 1.28% respectively, while yields on Italianand Spanish 10-year bonds each moved above 2.25%.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, inched up 0.01% to 95.23.