Euro immune to Greek woes, but for how long?
Forex pairs in this Article »
EUR/USD
FXstreet.com (Córdoba) - The euro continued to push higher versus the dollar in thin trade amid the US Thanksgiving Day holiday, hitting a fresh 3-week high just shy of 1.2900 amid expectations international lenders will soon agree an aid deal for Greece.
Risk appetite was also fueled by upbeat Chinese data and stronger-than-expected European PMI, with stocks closing with broad gains for a fourth day in the old continent.
Meanwhile, leaders of the euro zone members start a two-day meeting today in Brussels in order to come to an agreement regarding the bloc's budget for the next seven years.
Euro threatens 1.2900
The shared currency reached a fresh 3-week high of 1.2898 versus the greenback on Thursday although it lacked momentum to overtake 1.2900 (50% retracement of the 1.3170/1.2660 fall) and pulled back instead. EURUSD was last up 0.3% at the 1.2875 zone.
The technical picture remains positive and a break of the 1.2900/20 zone will open the doors for a quick run toward the 1.3000 mark. On the downside, loss of 1.2830 could threaten the bullish scenario.
According to the TD Securities team the clear break of the 1.2830 area, yesterday's third daily close above the 200-DMA and the ensuing rally overnight are obvious constructive signals for the comings days and weeks adding that there is not much holding a rally toward 1.2950. "As far as fundamental reasons go, the big picture still contradicts the technical signals, with recessionary conditions still not improving much", they commented. "Overnight though, we saw more headlines suggesting European leaders should be able to agree on the latest Greek bailout tranche at their meeting on Monday, and a successful Spanish bond auction. We also had small upside surprises on most of the core-Eurozone PMIs".
Meanwhile, from a longer-term view, the UBS analysts expect EURUSD to trade back to 1.20 next year as the Eurozone's economy cyclically underperforms the US. "Should Madrid request aid the ECB will buy Spanish government bonds in the secondary market, initially causing the euro to rally - but we think investors should use such gains as an opportunity to enter medium-term euro shorts as Spain may not be able to meet the conditions of its ESM borrowing later in 2013".
Risk appetite was also fueled by upbeat Chinese data and stronger-than-expected European PMI, with stocks closing with broad gains for a fourth day in the old continent.
Meanwhile, leaders of the euro zone members start a two-day meeting today in Brussels in order to come to an agreement regarding the bloc's budget for the next seven years.
Euro threatens 1.2900
The shared currency reached a fresh 3-week high of 1.2898 versus the greenback on Thursday although it lacked momentum to overtake 1.2900 (50% retracement of the 1.3170/1.2660 fall) and pulled back instead. EURUSD was last up 0.3% at the 1.2875 zone.
The technical picture remains positive and a break of the 1.2900/20 zone will open the doors for a quick run toward the 1.3000 mark. On the downside, loss of 1.2830 could threaten the bullish scenario.
According to the TD Securities team the clear break of the 1.2830 area, yesterday's third daily close above the 200-DMA and the ensuing rally overnight are obvious constructive signals for the comings days and weeks adding that there is not much holding a rally toward 1.2950. "As far as fundamental reasons go, the big picture still contradicts the technical signals, with recessionary conditions still not improving much", they commented. "Overnight though, we saw more headlines suggesting European leaders should be able to agree on the latest Greek bailout tranche at their meeting on Monday, and a successful Spanish bond auction. We also had small upside surprises on most of the core-Eurozone PMIs".
Meanwhile, from a longer-term view, the UBS analysts expect EURUSD to trade back to 1.20 next year as the Eurozone's economy cyclically underperforms the US. "Should Madrid request aid the ECB will buy Spanish government bonds in the secondary market, initially causing the euro to rally - but we think investors should use such gains as an opportunity to enter medium-term euro shorts as Spain may not be able to meet the conditions of its ESM borrowing later in 2013".
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