Forex: EUR/USD looking bid on U.S. “cliff”, Greece upgrade

FXstreet.com (San Francisco) - Coming off of a 7-day rally, the euro climbed to its strongest level against the greenback since May 1st today in Asia-Pacific trade, as markets appear to be somewhat encouraged on signs of progress in the U.S. "Fiscal Cliff" negotiations, lifting risk sentiment. The EURUSD has so far risen to as high as 1.3255 and last trades around 1.3245, up 0.2% on the day and up 2.4% heading into year-end.

On the European front, Standard & Poor's agency raised Greece's credit rating late Tuesday, and this event is likely to keep EUR short-term bid. From today's S&P statement: "The stable outlook balances our view of euro zone member states determination to support Greece's euro zone membership and the Greek government's commitment to a fiscal and structural adjustment against the economic and political challenges of doing so," the agency said

Richard Lee, Forex Analyst at FXstreet.com offers his analysis of EURUSD: "Closing above the 1.3180 resistance figure, EURUSD prospects are looking bullish. The upside penetration opens scope for a medium term advance on the 1.3505 fib resistance level. Any retracement will likely be held at bay by the 1.3157 figure."

If EURUSD continues its advance, the next bullish target may lie at 1.3350 (200-week EMA), then the 50% retracement of the 2011 to 2012 decline at around 1.3500. Mr. Lee identifies support levels at 1.3091, 1.3123 and 1.3175.