EUR/USD: 1.2335The Euro has managed to squeeze higher following an Italian one year bill auction today, selling Eur 8bio of notes at 2.767%, slightly higher than the 2.697% July auction. The yields did not jump too much though, and the relative success has held up hope that the ECB will eventually enter the market to buy Spanish and Italian debt and thus drive down their borrowing costs. There is still plenty of scepticism out there though and the upside for the Euro today remained somewhat limited, at 1.2373 and well below last week's 1.2442 high.
It has other wise been a reasonably quiet session with liquidity still pretty thin and little new news to excite the market, and given the holiday season this could well continue until the end of August.
Technically little has changed.
As stated, 1.2442 remains intact and that should easily remain the case, at least until the EU GDP figure later in the session and even then it would take a surprisingly strong reading to push it above this level. We also get the German ZEW survey on economic sentiment and US Retail Sales, neither of which elicit much enthusiasm for the topside, but we shall see.
Points to watch are at,- on the topside, today's high is at 1.2373 and we need a sustained move above 1.2363 (61.8% of 1.2442/1.2240) to progress towards 1.2400 and then the recent 1.2442 high. Above this sees 1.2472 (61.8% of 1.2742/1.2042), then the neckline resistance is currently at 1.2510, above which is 1.2574 (76.4%)
On the downside -, Today's low at 1.2260 is followed by 1.2240 (Friday low), 1.2225 (minor channel base), 1.2133 (2 August low) and then at 1.2042 (24 July low).
Look for a very quiet session until the data starts rolling out, and even then, with the charts looking mixed, I am doubtful that we are going to see too much of a directional move and would tend to use 1.2250/1.2400 as a guide, with a very mild upside bias, but not really convinced.
