Weekly Review: Will the Greek drama end with happy end?

This weekend should be very important for markets. Greece presented new reform proposals on Thursday. The Eurogroup will make a decision on these proposals on Saturday, before the officials of all EU countries will meet on Sunday.

French President Francois Hollande was optimistic on Greek reforms, while German government's spokesman declined to comment on Greek proposals. We already saw these kind of development. First comments are optimistic, following by more pessimistic comments.

If Greek reform proposals are not good enough and Greece's creditors reject them, it will mean a Greek default as the country is running out of cash.

If Greek reform proposals meet expectations of its creditors, it will open the door for the third bailout programme. Athens already submit a formal application. But the third bailout programme would not mean that all problems are resolved. The main problem is the restructuring of the Greek debt. German Chancellor Angela Merkel yesterday rejected any debt cut for Greece.

Concerns whether Greece will implement their reforms remain.

Markets are expected to be volatile, especially in the beginning of the weak, as investors remained focussed on the Greek debt problem. It is likely that the currency pair EURUSD will test the level $1.1300 or $1.1400 if Greece's creditors accept Greek reform proposals. If Greece's lenders do not accept Greek proposals, the currency pair EURUSD may test the level $1.1000 or $1.0800.