Forex-Signals: EURUSD

TOKYO: The euro wobbled in Asia on Monday after Athens and its private creditors failed to agree on a debt swap deal that is vital to avert a chaotic default for Greece.

Private creditors said on Sunday they had come to the limits of what losses they could concede in a Greek debt swap, putting the ball in the court of the European Union and the IMF.

As a result, the euro fell 0.3 percent to $1.2895, moving away from $1.2930 late in New York on Friday. It fell as low as $1.2854 in thin early dealings.

“The euro stalled ahead of $1.30 last week and unless the Greek talks come to some constructive conclusion soon, it’s hard to see it break that level in the near future,” said Sumino Kamei, a senior currency analyst at Bank of Tokyo-Mitsubishi UFJ.

Kamei said the euro was poised for some choppy trading with low volumes exacerbating volatility as many Asian centres including China, Hong Kong and Singapore are closed for the Lunar New Year holidays this week.

The focus now turns to a meeting on Monday of euro zone finance ministers who will decide what terms of a Greek debt restructuring they are ready to accept as part of a second bailout package for Athens.

Once the guidance from the ministers is clear, talks on the restructuring could be finalised later in the week.

Traders said a clear break of $1.2870-80 could see major support at $1.2800-10 tested. Last Friday, the single currency hit a 2-1/2 week high at $1.2987, having risen nearly 3 percent from a 17-month trough of $1.2624 plumbed on Jan. 13. Any upside on Monday was limited by the Kijun line on charts at $1.2912.

Speculators boosted net euro shorts to a fourth straight record in the week to Jan. 17, suggesting the downtrend for the single currency remained intact.

Some traders said position unwinding may yet give the euro a fillip in the near term and push it through reported offers around $1.30 in thin holiday trade, although further gains above that level could be difficult.

Against the yen, the euro was at 99.33, down from last week’s peak around 100.33. On the Australian dollar, it fetched A$1.2281, not far off a record low around A$1.2220 set on Jan. 17.