Investing.com -- EUR/USD rallied slightly on Tuesday one day after falling sharply, as currency traders continued to digest a historic agreement between Greece and its euro zone creditors amid increasing odds of a Grexit.
The currency pair traded in a tight range between 1.0968 and 1.1083 before settling at 1.1010, up 0.25% for Tuesday's session. One session earlier, the euro plummeted more than 1.3% against its American counterpart after Greece secured a three-year, €86 billion bailout from its creditors in exchange for a swath of strict austerity measures. As tense negotiations reached its breaking point during acrimonious high-level discussions between the two sides over the last month, EUR/USD has declined by more than 2.2%.
The pair likely gained support at 1.0917, the low from July 7 and was met with resistance at 1.1411 the high from June 22.
In his first televised interview since Monday's landmark accord, Greece prime minister Alexis Tsipras told a Greek broadcasting network that the deal allows the nation to preserve its progressive values, while staving off bankruptcy. The agreement reached in the wee hours of Monday morning, came after Greek citizens rejected a proposal by a troika of its creditors in a sweeping referendum on July 5.
"I am not going to escape and I will take the responsibility even by signing an agreement I don't believe in," Tsipras said in an interview with Athens network ERT. "We got an agreement with hard reforms but not the complete impasse of the 25th of June. Prior actions didn't change after the referendum, I must be honest about that. But we have a longer funding period and debt relief."
Although a Greek departure from the euro appears unlikely following the developments over the last two days, Tsipras still did not rule one out.
"I cannot say anything with certainty before the deal finally signed," Tsipras added.
Tsipras continued to seek support from Parliament ahead of Wednesday's critical vote. The deal requires Parliament to ratify four measures related to tax, pension and budget reforms in order to trigger a vote from six other national parliaments throughout the euro zone.
Meanwhile, officials from the International Monetary Fund urged the euro zone to provide Greece with a more manageable debt sustainability program, by offering a 30-year grace period for the cash-strapped nation to repay its debts. While the European creditors are considering pushing back repayment dates and slashing interest rates on loans to Greece through the European Stability Mechanism (ESM), euro zone officials have been reluctant to offer a haircut on its significant debt obligations.
In addition, IMF officials warned that Greece's debt level could reach 200% of its GDP in the near future if debt sustainability measures are not taken immediately.
"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date and what has been proposed by the ESM," the IMF said in a statement.
Investors also await the start of Federal Reserve chair Janet Yellen's two-day testimony before Congress on Wednesday for further indications on the timing of a highly-anticipated interest rate hike. On Friday, Yellen said the Fed anticipates raising interest rates later this year if the U.S. economy and labor markets continue to show improvement in the coming weeks.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell 0.22% to 96.79.