EUR/USD: 1.2280
The Euro has done little against the dollar today but continues to make new lows against both Aud and the Kiwi and has come within 3 points of the long awaited 0.7788 target against Sterling.
It remains near 1.2280, as it has done for a good part of the week weighed down by comments from the German Finance Minister Scheuble that Spain's troubles are far from over. This came despite the German parliament today approving its contribution to the Spanish banking bailout. Spain today held a bond auction and yields jumped across the board. The 10 Year yield has now moved back above 7%.
The US dollar though was unable to make too much headway given the soft data, released during the session. The Philly Manufacturing Index was weaker than expected, as were the jobless claims and home sales, again raising the hope that the Fed will act to stimulate the weak economy through QE3.
The Euro remains stuck in the 1.22/1.23 range and vulnerable to comment from EU leaders. The charts are showing precious little bias in either direction against the dollar and right now it appears that there are better things to look at, with the crosses remaining more interesting.
The descending trendline has now been broken, although the 1.2335 barrier remains intact (7 July high), with today's high falling just short at 1.2323. A move above this area would suggest progress to 38.2% of 1.2692/1.2162 trendline level at 1.2365, and beyond there it is possible to go on to 1.2425, the 50% pivot, and I think that if we do go above 1.2335, it is quite likely that this could be seen, but right now, the next few hours look like doing very little.
The downside continues to have minor support at 1.2215 and then a cluster of targets between 1.2162 and 1.2185, and again I am doubtful that we take on these in the current session. A break would head towards 1.2100 and then on to 1.2000, below which is the target for the whole move at 1.1875.
There is not much out today with the German PPI being the highlight.
