By Fast Brokers – The EUR/USD is popping higher from its recent consolidation despite the fact that the spread between Spanish and German bonds have reached an all-time high. Spain still managed to auction off over $3 billion worth of bonds, boosting investor confidence that Spain will be able to support itself on the open market. Additionally, investors are feeling confident after news that Spain plans on releasing the results of its bank stress tests. Spain going public with its stress test results is leading some investors to believe that its financial industry may not be in as bad of shape as previously anticipated. Meanwhile, EU leaders are meeting for a one day summit to discuss means of better coordinating financial policy throughout the union. Leaders are emphasizing greater financial regulation and investors will be paying close attention to comments emanating from the summit. Overall, it seems the Euro is receiving a steady inflow of money as the currency outperforms the Pound, highlighted by a solid bounce in the EUR/GBP. Investors are now waiting for America’s data set, which includes CPI, the Philly Index, and weekly unemployment claims. The data wire will be relatively quiet tomorrow, meaning today’s U.S. data and results from the EU summit should be the driving forces across the board over the remainder of the trading week.
Technically speaking, the EUR/USD still faces downtrend lines, though the near-term barriers are withering. The EUR/USD does face topside obstacles in the form of intraday and 5/28 highs. Additionally, the psychological 1.25 level could serve as a solid barrier should it be tested. As for the downside, the EUR/USD has growing near-term uptrend lines serving as technical cushions along with intraday and 6/15 lows.
Present Price: 1.2387
Resistances: 1.2415, 1.2437, 1.2466, 1.2488, 1.2526, 1.2546, 1.2562
Supports: 1.2380, 1.2357, 1.2332, 1.2313, 1.2294, 1.2267, 1.2243
Psychological: June lows and highs, 1.23, 1.25, 1.20
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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