Forex: EUR/USD sits around 1.2950 after paring drop

FXstreet.com (San Francisco) - Before finishing virtually unchanged on the day at 1.2950, the U.S. dollar advanced to 1.2880 against the Euro yesterday, hitting a 3-day low on concerns over Greece, Spain and uncertainty over whether the world's largest economy would be able to avoid falling off of the 'fiscal cliff'.

With regards to Greece, market participants are unclear about how Athens would implement a deal on Greek debt. Hitting the newswires now are comments from the ratings agency Moody's, saying that it sees Greek debt as unsustainable, and believes that a Greek default on private held debt is still highly probable.

From a technical standpoint, the EURUSD is 'short term bullish' as price returned to starting levels, according to Valeria Bednarik, Chief Analyst at FXstreet.com, who also notes that "accelerations above 1.2950 will expose the 1.3010 weekly high, followed by 1.3040 price zone, and probable roof for today if the upside momentum continues." The analyst identifies support levels at 1.2910, 1.2875 and 1.2840.

EURUSD currently stands at 1.2945 so far this Thursday.