EUR/USD: 1.2820The Euro has recovered from its session lows of 1.2763, but remains below the 200 DMA as voting in the US election finally takes place.
Early weakness was seen due to concerns that the vote in Greece, taking place later today, will fail to pass the Eur 13.5bio of spending cuts required in order to receive the next tranche of the bailout funds. There is plenty of opposition if the vote does get passed with some serious unrest on the streets of Athens.
It was never going to be one-way traffic though as the dollar has its own concerns, and once the US got in, focus turned towards how the incoming President will deal with the "fiscal cliff" of automatic spending cuts and tax hikes that will take place in 2013 unless Congress can come to an agreement of budget cuts.
Technically, not too much has changed. The short term bullish divergence has seen the Euro hold above the support at around 1.2750, whilst unable to break back above the initial resistance at 1.2825.
On the topside the 200 DMA at 1.2825 remains the first hurdle, above which, sellers will be seen at 1.2848 (23.6% of 1.3139/1.2763) and then at 1.2880 and at 1.2905 (38.2%) and 1.2948 (50%).
The downside will see bids at around the session lows at 1.2763 and then at 1.2745 (18 June high at 1.2747) and Fibo support at 1.2741 (38.2% of 12042/1.3171), below which lies 1.2692, the 29 June high.
For the time being the momentum indicators have turned a little higher and further gains towards 1.2900 would not surprise. The dailies though, suggest that the downside is not yet finished with and so overall it looks as though some more trade either side of the 200 DMA lies ahead with a bias to selling near term strength, looking for an eventual test of 1.2750.
Today sees EU Retail Sales, German IP.
