FXstreet.com (Córdoba) - The euro advanced versus the dollar
after the Federal Reserve announced its new US Treasuries purchase
program, but lacked momentum to break above the 1.3100
In Europe, finance ministers agreed that an ECB supervisor of the
region's banks should be operational by March 2014, while eurozone
finance ministers also approved the release of €49B in funds to
Greece through March.
Despite the generally positive mood, the euro has struggled to move
higher and instead it entered in a consolidation phase. EUR/USD
barely reacted to the latest string of US data, while Wall Street
indexes remain nearly flat as focus returns to 'fiscal cliff'
Euro fails at 1.3100, positive bias persists
So despite having made 3 attempts within the last 24 hours, EUR/USD
has been unable to overcome the 1.3100 psychological level. Should
the pair pierce the 1.3100 mark, it could easily reach the 1.3170
area, (September's double top) within the next sessions.
On the downside, loss of the 1.3030 support area, could see the
pair slide back to the 1.2980 region. Below this latter, bullish
potential would ease, leaving EUR/USD vulnerable for a retest of
1.2900. Nevertheless, uncertainty regarding the fiscal cliff could
prevent investors to take big bets at this point, leaving EUR/USD
confined to its 1.2660/1.3170 range, where it has traded since
"On the daily chart though, EUR/USD's recent buoyancy looks rather
constructive", says the TD Securities team. "Notably, 1.3125/30
marks the neckline of a head & shoulders continuation pattern,
the break of which would imply a four big figure move higher,
However, Nick Bennenbroek, Head of Currency Strategy at Wells Fargo
Bank thinks that a period of correction could be ahead. "Despite
the flurry of activity, foreign currencies have struggled to move
significantly higher, suggesting a period of corrective foreign
currency weakness may not be far away", he commented.