EUR/USD: 1.3055An extremely tedious start to the week has seen the Euro supported above 1.3000, after regional Spanish elections saw the PM, Rajoys Party win victory in Galicia and removes a potential hurdle to request a bailout. At the same time, no bailout has yet been requested, and thus the upside has been capped at 1.3083 and we therefore remain in a stalemate and at levels pretty close to the weeks opening levels.
While on bailouts, Cyprus has avoided the reticence of Spain and according to government reports, has today asked the Troika to draw up plane to negotiate an assistance package.
Technically we are pretty much where we were on Friday and the parameters appear to be governed by the contracting trendlines, with support and resistance currently at 1.2870/1.3120.
More immediate levels to watch are at 1.3000, a break of which would see a decline towards minor Fibo support at 1.2945 (61.8% of 1.2825/1.3139) and possibly on to 1.2900 (76.4%). Below here would suggest a test of 1.2870, which should be strong, but a break would take us to the 200DMA at 1.2815 which has held pretty well recently, above the 1 Oct low at 1.2802.
The upside will see sellers at today's 1.3083 high and then at 1.3100 and the recent 1.3140 high, which is also 38.2% of 1.4939/1.2042 and should prove very strong. A break would see a return towards the 17 Sept 1.3171 high and then to 1.3266,1.3368 and 1.3480, all of which acted as tops between February and April, although it looks unlikely that they will come under pressure this week.
Today, look for another rangebound session with a mild bias back to the downside to test 1.3000 and possibly a bit lower. It looks as though it will be very slow though, unless we get something unexpected. It is a quiet news day on the economic front, with the market likely to be watching/debating the outcome of the final US Presidential Debate. Use 1.3000/1.3100 as a guide.
