At the meeting of the Finance Ministers of the countries of Eurozone, which ended on Thursday, an agreement about the aid to Greece has not been reached. Some countries have already announced their plans in case of default in Greece. This development will pose serious risks not only for Greece but for the EU as a whole.
The program of the financial aid to Greece in the volume of 245 billion euro will terminate on 30 June and Greece shall pay to IMF the amount of 1.54 billion euro. The country will not be able to do this without the other money tranche.
At the same time the minutes of the meeting of the Bank of England were made public on Wednesday. They say that inflation will significantly increase by the end of 2015, the increase in the interest rates will be gradual, and the average wages in the last three months have grown by 2.7% versus the forecast of +2.1%.
The development of events in Eurozone puts pressure on the pair EUR/GBP; therefore in the medium-term the pair will trade down.
Support and resistance
Since February 2013 the pair EUR/GBP has been moving in the downward channel. On 16 June 2015 the pair has broken the bottom line of the corrective upward channel and now it goes down to the lows of this year (0.7035).
On the daily chart resistance levels are 0.7240, 0.7400 (ЕМА144) and 0.7470 (Fibonacci 23.6%).
On the daily and four-hour charts the indicators OsMA and Stochastic give sell signals.
Support levels: 0.7120 and 0.7055.
Resistance levels: 0.7200, 0.7240, 0.7400 and 0.7470.
It is advisable to open short positions from the levels of 0.7200 and 0.7240 with the targets of 0.7055 and 0.6990. Alternative scenario is possible if the price breaks down the level of 0.7400. In this case the targets will be 0.7470, 0.7575 and 0.7730.