EUR/USD: 1.2622
The Euro continued to squeeze higher late in the session, despite Spanish bond yields earlier topping 7% today, dragging italian yields higher, to 6.3%. The rally seems to have come about on the back of a Reuters story that the Central Banks stand ready to act and will add liquidity to the markets next week, if needed, after the Greek election. Quite why that is bullish for the Euro is beyond me, but as we head into the weekend who am I to question the market. Most of my friends in the interbank market are going to be absolutely square, looking to reassess on Monday and I will be joining them.
The major European bourses finished more or less flat, although the Greek market managed a lazy 10% rally! The S+P finished up 1.08% and will probably be risk supportive early in the session.
In the meantime technical levels are at 1.2667 (Monday’s high/38.2% of 1.3283/1.2288) which should contain it, if indeed we reach it, but a break would lead us on to 1.2720 and 1.2783 (50%).
The downside has support at 1.2540 and below here at the 1.2500/20 congestion and then at 1.2475 minor rising uptrend line. A break of this would see a decline towards 1.2450 and then to 1.2380,
Mario Draghi will be speaking today and may provide some short term volatility.
Be square as we go into the weekend.
We have the G20 coming up on Monday/Tuesday which will probably be the usual non event, but looks as though it may be mildly Euro supportive, just in case they actually come up with something positive with regards to digging the EU out of its hole. Very doubtful.
Have a good w/e. Be square!
