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EUR/USD fades a spike to 1.1465, back to square one

The EUR/USD pair trims gains and now slips back below the mid-point of 1.14 handle, having failed to sustain at fresh 2016 highs.

EUR/USD hits fresh 2016 highs, then retreats

Currently, EUR/USD trades 0.16% higher at 1.1425, having met strong selling pressure at 1.1465, fresh six-month highs. The main currency pair’s bullish run lost legs over the last hours and the prices retraced half the intraday gains, as the US dollar halted its downwards spiral and recovered losses against a basket of six major currencies. The USD index now loses -0.17% to 93.80, versus a -0.35% drop seen earlier on the day.

The renewed selling pressure seen on the major can be also justified by a sharp decline in the EUR/GBP cross as the pound strengthened against the shared currency after the UK CPI data outpaced estimates and hit fresh sixteen-month highs in March.

However, the sentiment remains underpinned as the EUR traders continue to cheer upbeat German CPI and PPI data released earlier today. Germany’s CPI grew 0.8% m/m in March, faster than February's figure of 0.4% and in line with the estimates.

Attention now remains on the US import prices data in absence of relevant economic news from the US docket today, while the Chinese trade numbers due tomorrow will be closely monitored for its impact on the broader market sentiment.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance at 1.1465/87 (Daily & 2016 high/ Daily R2). A break beyond the last, doors will open for a test of 1.1500 (psychological levels). On the flip side, the immediate support is placed at 1.1387/72 (1h 200-SMA/ daily S1) below which at 1.1316/1.1300 (20-DMA/ key support) could be tested.
 
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Greece and lenders adjourn bailout review to after IMF meeting

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By Renee Maltezou

ATHENS (Reuters) - Greece and its international lenders adjourned bailout review talks on Tuesday, potentially delaying a crucial cash handout to the debt-stricken nation, and will resume them immediately after this week's IMF spring meetings.

Greece's review of progress, under a bailout deal reached last July, has dragged on for months, largely due to differences among the lenders over its projected fiscal shortfall by 2018 and resistance from Athens over unpopular measures.

Athens signed up to a new bailout worth up to 86 billion euros ($98 billion) last year, its third international rescue package since 2010.

A positive review will unlock up to 5 billion euros in bailout aid which Athens needs to repay 3.5 billion euros to the International Monetary Fund and the European Central Bank in July, as well as unpaid domestic bills.

Mission leaders of European institutions and the IMF will return to Athens after the April 15-17 IMF meetings in Washington with a view to concluding an agreement by April 22, when euro zone finance ministers are scheduled to meet, Finance Minister Euclid Tsakalotos told reporters.

"The Greek government and the four institutions agreed there was progress," Tsakalotos said, referring to European institutions and the International Monetary Fund. Tsakalotos will also travel to Washington for the meetings.

European Union institutions and the IMF are at odds over the primary surplus Greece could hope to achieve by 2018 - the EU sees the balance at 3.5 percent of national output. The IMF says that forecast is too optimistic and says it will be closer to 1.5 percent of GDP.

With Athens itself, divergences hinged on the depth of pension reform and regulating non-performing loans, particularly those involving primary home mortgages.

Reflecting growing uncertainty over the review, Greek bank shares (FTATBNK) dropped almost five percent by mid-session.

"The negotiation with the lenders should have been concluded long ago," government spokeswoman Olga Gerovasili said, adding that Athens' proposals were comprehensive but the IMF stance was not helping reach a deal.

"Greece has categorically stated that it will meet to the letter the July (bailout) agreement, and underlines all those involved in the negotiations should do the same," she said.

The publication by WikiLeaks last week of a transcript detailing IMF tactics on Greece, has added to growing tension.

The IMF is expected to decide whether to co-finance Greece's third bailout after the review and in light of how much debt relief Greece receives.

An ECB spokesperson said "good progress" has been made in all areas during the Athens-based talks, however another source close to the talks there were many outstanding issues.

In an effort to show that Greece's lenders were on the same page, executive ECB board member Benoit Coeure backed the IMF.

"We fully agree with the IMF on the need for a strong policy package. The aim of this discussion is the conclusion of the first review of the MoU and a new program with the IMF," he said in a statement.
 
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