FXstreet.com (San Francisco) - Another day and a new fresh
2-month low in the EUR/USD. The Euro has closed its 5th straight
negative day against the Dollar but in practical terms, the pair
remains trading quietly above 1.2700.
Early in the European session, the EUR/USD set a fresh 2-month low
at 1.2660 amid uncertainty on how, when, and under what terms
Greece will receive its next tranche of aid. However, media
reporting that Germany wanted Greece to receive a single €44
billion sent the pair above the 1.2700. After that, the pair traded
calm between 1.2700 and 1.2720 in the American session.
Wells Fargo's Head of Currency Strategy Nick Bennenbroek considers
that the USD has strengthened with the markets focus again turning
to the Eurozone debt crisis. Bennenbroek stated that peripheral
Eurozone bond yields are under some pressure again today, with
Spanish and Italian ten year yields both higher. He notes that the
Euro is down, while Scandanavian currencies are the weakest G10
Overall, Wells Fargo's analyst highlights the general risk off
sentiment across asset classes, with Asian and European equities
down. Between EZ jitters and the US fiscal cliff, Bennenbroek
maintains his bias for USD strength.
In the same line, Brown Brothers Harriman analysts have noted that
EUR/USD made a new cycle low today near 1.2660 and is slowly and
steadily nearing their 1.2500 target. They affirmed that just below
that level is a retracement objective near 1.2475 from the big
July-September rise in the pair and a break of which would open the
door for a target of the July low at 1.2045.
BBH pointed that negative euro sentiment continues amidst further
delays to Greek aid as well as more reports of poor Eurozone
EUR/USD remains weak
As for the short term and in the hourly chart, the EUR/USD shows
price breaking back below a bearish 20 SMA while indicators turn
south around their midlines, as price approaches daily low; "In the
4 hours chart latest spike was contained by 20 SMA that continues
heading south as well as technical indicators," comments
FXstreet.com chief analyst Valeria Bednarik. "The downside remains
favored for the pair, with a break below 1.2660 exposing 1.2610
next strong support zone."
On the fundamental field, FXstreet.com analyst Richard Lee,
believes that there is 3 things that has been supporting the Dollar
today, the Home Depot better than expected earnings report, the
meeting between Obama with policymakers and business leaders and
the US retail sales expectations.
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by Richard Lee
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by Dean Popplewell
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t by Katarzyna Komorowska