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The euro is consolidating last week gains versus the dollar, oscillating just below the 1.3000 level, as eurozone finance ministers meet again to discuss Greek financial situation and possible measures to ease the country's debt burden.

Even though in Europe, expectations for an agreement are growing, there hasn't been much to help inspire more than consolidating ranges. Meanwhile, stocks are broadly lower in Europe and the U.S. after last week's rally as risk appetite declined.

Euro consolidates below 1.3000

The EUR/USD continues to waver in a pretty tight range below the 1.3000 psychological level as investors await the outcome of the Eurogroup meeting. In this regard, the TD Securities team argues that a positive outcome on the Greece appears almost fully expected, although some lingering doubts could see a minor lift to the EUR and other risk currencies upon confirmation. "If we do not get consensus from that meeting today, we expect a bigger retraction for 'risk'."

In the same line, Danske Bank analysts note that the latest move higher in EUR/USD underlines in the view that the market sees a high probability that a solution will be found the Greek issue. "Hence, the market reaction to a breakdown of the talks will be much more severe than the reaction to an 'expected' solution. Note in that respect that peripheral bond markets continue to show strength, despite the string of bad headlines last week (French downgrade, Greek talks etc.)".

Meanwhile, technically speaking, the short-term outlook improved significantly last week, as the pair managed to regain several resistance levels. A break above 1.3000 would open the way to the 1.3170 area (September's double top), while on the downside, loss of 1.2900 will shift focus to the downside in the near-term.

"We have been pointing to the improving technical signals for the EUR for a few weeks now, but after Friday's move we are getting close to some pretty key levels here", says the TD Securities team. "For the EUR/USD, 1.30 is the pretty clear topside level to watch today, but above there, the 1.3060/70 area is the neckline to a big head and shoulders reversal on the weekly charts".

Source: Euro Wavers With Eyes On Eurogroup Meeting