Source: ForexYard
The EUR has been unable to hold onto its gains following yesterday’s Financial Times story indicating EU negotiations are taking place to keep the existing European bailout when the new fund takes effect in mid-2012. The drop in the value of the EUR/USD comes after a German response threw cold water on the possibility of the ESM and EFSF running simultaneously
With both the ECB meeting and the EU economic summit only a day away the rumor mill is running at full speed. Yesterday evening the FT reported the EU is debating the possibility of keeping the current European bailout plan when the new ESM mechanism is expected to take over and this sparked an EUR rally into the NY close. This morning the story was denied by German officials and the EUR gave up those gains.
The EUR/USD rose as high as 1.3450 before running into resistance at the 20-day moving average, a level the pair has failed to move above for the past week and a half. Support is seen back at the rising support line from the November low at 1.3350. Additional support may be found at 1.3260 from the November 30th low.
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