EUR/USD: 1.2960It has been another listless day in the markets given that New York is once again closed, but the Euro has made up a little of its lost ground, holding the support at 1.2880 after the Spanish GDP shrank slightly less than expected (-0.3% qq (exp -0.4%) and -1.6% yy(-1.7%), and after Italy managed to sell EUR 7b at the bond auction today at slightly lower yields. Elsewhere, the German Unemployment was unchanged at 6.9% and had little effect.
This all ensured to underpin the Euro, and in thin trading conditions, we are now back in the middle of the 1.2900/1.3000 range, with technically, little new to report.
On the downside, the Euro will continue to see good bids in the 1.2880/90 range, below which are stops that could take the Euro down to the 200 DMA at 1.2832, although possibly not today. This has held firm on previous attempts and it sits above the 1st Oct low at 1.2802, so should be strong at the first crack at it. A break would suggest further declines towards 1.2740/10 area, but I don’t see this yet.
The topside has reached 1.2982, where it has so far run out of steam, but a further push would test the sellers at 1.3000. Back above here would head towards the recent highs at 1.3022 and then at 1.3074 with the long term descending trendline now at 1.3090, which should prove strong. An unlikely break would see the 17 Oct, 1.3140 high, which is also 38.2% of 1.4939/1.2042.
I don't think we are going anywhere too far in either direction in the coming session, given the mixed nature of the indicators. While the shorter term MACDs show the possibility of a little more topside action, the dailies are pointing lower and thus I would use 1.2910/1.3010 as a guide, with the possibility of some volatile action, but directionless action, once NY get back in, later on today.
Today sees W: EU CPI, Unemployment, Eco Fin Meeting.
