EUR/USD: 1.3135The much anticipated Spanish bond auction resulted in Spain selling Eur 2.5 billion of 2 and 10 year bonds, at the top end of the targeted amount although yields on the 10-years were higher, at 5.743%, reflecting fears that Spain may miss budget deficit targets, Not a bad result, but it left the market nervous of Spain’s ability to repay its debt and the Euro dipped as credit default swaps widened but recovered in volatile trade after the US data showed that US Initial jobless claims fell slightly to 386k in the week, much higher than expectation of a drop to 366k.
Existing Home sales were down 2.6%, with the market looking for a slight rise. Equity markets didn't have a special day with the Dax down 1%, CAC -2% and the S+P down 0.6 %. The French market had a particularly tough day following rumours of a downgrade of French sovereign debt. This was quickly denied, but did not do much to help the stock market.
So, technically we have very little change from yesterday as the Euro currently remains steady at around 1.3120 for the 3
rd day in a row. With the 4 hour charts giving no hint in either direction the Euro is in neutral territory, so it is time to sit on our hands and let the market do the work. The dailies still suggest a move lower is very possible but with the market trading from such a one sided bias, and stories going around that the hedge funds are looking for a swift move to 1.25, the chances are that we get a nasty short squeeze first. The support and resistance levels remain unchanged from yesterday. We need a move below 1.3150 in order to see the possibility of a run towards 1.2970, while above 1.3170 would allow a move to 1.3210/40 area. All rather confused today and I would be looking elsewher0e for a trade.
Data today includes German PPI, IFO but not a lot else. It could be a quiet Friday! Let’s hope so! Have a good weekend
