EUR/USD: 1.2710 It has been pretty much a non-event today given the holidays in Europe and the US and most currencies, including the Euro, are pretty much unchanged from yesterday's levels in Asia.
The main event of the session was the Greek parliament passing the 2013 austerity budget, although this was not a surprise and caused very little reaction in the market. Of more immediate interest will be whether Greece has the funds to make 5 bio Euros of T-Bill redemptions this week, but the Troika of the IMF, ECB and the EC is reported as having put together a plan to allow Greece an extra 2 years to reach the previously agreed budget goals although it will cost an extra Eur32 bio. The bickering though, continues between the various Eurozone nations as to whether Greece should receive any more funds and this will continue to cap the Euro into any short-covering rallies.
That aside it has been quiet and there is really little change for the Euro today. Likewise the US dollar has shown little interest due to the Veterans Day holiday, although the "fiscal cliff" negotiations will be firmly back in focus today.
From a technical perspective, we have seen a low of 1.2696, above Fridays 1.2690 low and the stop losses that are said to be gathering at 1.2685. If we do take the stops out, then there is not too much to hold the Euro up before the 100 DMA at 1.2634 with the next support at around 1.2607 (50% of 1.2042/1.3171). Below this would suggest deeper declines to wards 1.2475 but we will deal with that if/when it comes into view.
While the dailies are still pointing lower, the 4 hour charts are showing some bullish divergence and I would therefore be wary of bounces, but which, if seen, should provide good selling opportunities for the greater downtrend. There are sellers reportedly lined up in the 1.2740/60 area although above here, a short squeeze could take us back up to 1.2770 minor trendline resistance and possibly onto 1.2860 (38.2% of 1.3171/). Beyond there looks unlikely, but the greater trendline resistance is now at 1.2920.
Today could be another rangebound session given that the only economic data of note is the ZEW survey from Germany. Focus will again be on Greece and Spain so the upside for the Euro looks limited, while at the same time I would be doubtful of seeing it much under 1.2650 today. Look for 1.2650/1.2750 to act as an initial guide to today's range.
