EUR/USD: 1.3115There is not really a lot to add today as the Euro has spent the session consolidating its gains of last week and has traded a 90 point range either side of current levels. The market is beginning to focus its attention now towards Spain and whether or not it will ask the EU for a sovereign bailout. With no word yet from Madrid, bond yields began to rise again today and headed back towards 6%, having dropped sharply in last week following the ECB proposal to buy the bonds of the indebted nations. The concerns over further upheaval in Europe will hamper any further upside momentum for the Euro, although the longer term charts are supportive of further gains.
The chart points to watch are largely unchanged from yesterday. Having made another attempt to the topside to1.3171, the Euro has again come to rest below the Fibo level at 1.3145 (38.2% of 1.4939/1.2042 and this remains the first point that we need to overcome on a sustained basis to make further gains towards 1.3215 where the longer term downtrend currently lies. A break above this downtrend resistance would carry us on to 1.3283 (1 May high) and then to 1.3380 (2 April high).
A return to the downside will continue to see buyers at minor levels of 1.3075 (low today 1.0302) and then at 1.3000, but the first Fibo support is not to be found until 1.2908 (23.6% of 1.2042/1.3171).
For the coming session, it looks to me as though we could be in for more of the same directionless, choppy price action. The Euro may get a bit of a directional move from the German ZEW survey, but overall 1.3050/1.3150 may cover it.
