Despite the Eurogroup meeting fiasco, which left Greece with empty hands once again, the euro managed to quickly reverse losses as investors shrugged off the disappointment and decided to support the shared-currency.
The euro seems detached from fundamentals lately as eurozone woes are far from over and no decision was made neither on Greek debt nor Spanish bailout. The EUR/USD continues to find buyers on dips.
"Some of the financial officials, including German finance minister Schaeuble, have described the remaining issues as technical questions, while finance ministers have agreed to meet again next Monday," said the Wells Fargo team. "This is likely supporting the notion that Greece will - eventually - receive further assistance, and probably explains the euro's recovery from earlier weakness today."
Euro erases losses, back above 200-day SMA
EUR/USD bounced from the 1.2735 low and returned to the 1.2800 comfort zone where it has been trading within the last hours, having hit a new 2-week high of 1.2831 during the American session.
Technical picture remains positive, as the pair managed to close yesterday's session above its 200-day SMA, an important technical level. Immediate target is now seen at 1.2840 and then the 1.2900 psychological level, while the 1.2700 level should hold pullbacks to keep the bearish threaten contained.
"Not surprisingly, the EUR took the brunt of the impact from the news on Greece, and was the biggest G10 underperformer, at first. However, since then the single currency has recovered the entire move lower against the USD, and has made decent net gains against the broadly weaker JPY. EURUSD is still straddling the 200-day moving average, but two daily closes marginally above that level are positive signals," the TD Securities team notes. "That EURUSD had a relatively minor and fleeting reaction to the negative news overnight shows the strength of support as well. The bigger fundamental picture is still dour, but such signals are hard to ignore and suggest EURUSD could be in for higher levels in the coming weeks."