EUR/USD: 1.3050It has all been a bit of a non event again today with the Euro seeing its 1.3084 session high in late Asia, following the BOJ easing, before sliding and briefly breaking 1.3000 (low 1.2992) and then squeezing back up to current levels, in a continuation of the post FOMC consolidation.
In Europe, the Mexican standoff between Spain and the EU continues. The ECB stand ready to buy Spanish debt but will not do so until Spain makes a formal request for a bailout. Spain are reluctant to do that as they will not like the tough conditions that are likely to be imposed on them.
Until there is some outcome from this, it looks possible that the Euro will just drift around current levels, with traders unwilling to put on structural positions due to the lack of clarity on the situation.
Elsewhere today, the August US housing data continued to show improvement with existing home sales rising by 7.8%, the fastest in two years and showing that the US economy is showing the faintest signs of life.
Technically, there is no change and it appears to me as though we should expect more of the same today with the Euro looking as if it may be confined to the recent range between 1.3000/ 1.3170. The charts are all a bit mixed, hinting at a lack of real direction and momentum and so I would not expect too much today unless there is an unexpected news item coming to market.
The expected range would be a little higher than yesterdays and I would think 1.3000/1.3120 might cover it. It does not really look as though the Euro will head too much lower than today's 1.2992, but a break may see us head towards 1.2908 (23.6% of 1.2042/1.3171. The 4 hour indicators are still pointing lower but look to be running out of steam and the hourlies are pretty flat.
The topside. above 1.3100 would suggest a return towards the recent 1.3170 high and then on to major resistance at 1.3205, which currently looks a step too far.
There is a fair bit of economic secondary data out today, but nothing that is likely to produce huge volatility. There is also the EU meeting on systemic risk....1.3100/1.3120.
