FXstreet.com (Barcelona) - A resilient Euro stood firm against
the cascade of bearish news, the most notorious being the official
recession in the Eurozone, the second time it occurs in the last
three years. EUR/USD holds above 1.2760 after a 6-day high at
The increasing tensions between Israel and Gaza, with the first
intensifying the bombing into the Hamas-based territory, caused
some risk aversion in the markets during Thursday, as noted by the
S&P 500, down 0.2% and the DJIA, -30pts.
In the US, mixed fundamentals failed to inspire the bidding tone,
after jobless claims soared, the Philadelphia manufacturing
activity came lower-than-expected, while US core CPI stood at a
neutral 2.0%. Focus in now on the 'fiscal cliff' negotiations, set
to start today. U.S. President Barack Obama will hope to find some
In European session ahead, a relatively quiet one is expected with
little in terms of EUR macro related data. The second-tier events
to highlight are the EU current account and Italy trade balance at
09:00 GMT, followed by EU trade balance at 10:00 GMT.
In the political front, there will be slightly more action with EU
Commissioners Rehn and Barnier attending EU-Russia economic
dialogue, Deutsche Bundesbank President Jens Weidmann due to speak
in Berlin at 10:30 GMT, and the Spanish government holding its
Friday's usual meeting, which could pour some headlines into the
From Japan, PM Noda is scheduled to meet the press at 09:00 GMT
after dissolving parliament at 06:45GMT, which could add more
volatility to EUR/JPY cross, and SNB Governing Board Chairman
Thomas Jordan is due to deliver a speech in Zurich at 07:30 GMT,
which could bring some volatility to EUR/CHF cross as well.
In-House Technical Analyst Valeria Bednarik, who had been recently
calling for lower levels, has a more constructive view in favour of
the bulls for this Friday, noting that dips are finding buyers on
this new buoyant euro market mode. Valeria observes "indicators
heading north above their midlines while 20 SMA gains bullish
slope, supporting an upside continuation." There is scope to test
next key resistance around 1.2880, she said.
Karen Jones, Head of FICC Technical Analysis at Commerzbank,
continues to support the case for more selling to resume, and
comments that the recent break down of a symmetrical triangle still
suggest the next direction is 1.2480 region. Despite the recent
bounce, she argues that "this has not dislodged any resistance of
note and is viewed as merely a minor correction. Rallies are
expected to find initial resistance at 1.2800 and be contained by
the 1.2890/92 short term downtrend".
Immediate resistance to the upside for EUR/USD shows at yesterday's
6-day high/200 day SMA 1.2802/8, followed by Oct 10 lows/38.2% Fib
of 1.3140/1.656 at 1.2835/40, and Oct 26/30 lows/Nov 07 highs at
1.2882/78. To the downside, closest support lies at recent session
lows 1.2664, followed by Nov 07 lows at 1.2735, and yesterday's/Nov
08 lows at 1.2716.