EURUSD Analysis News And Forecast For June 25th-29th 2012
A busy week in the euro-zone and world markets had market participants running for cover and pushed the key EUR/USD currency pair lower during the later part of the week. This was in sharp contrast to the sentiment as the week opened when the Greek elections turned in a pro-bailout result, which set aside the immediate risk that Athens may default. The strong bearish trend nonetheless prevailed in the end. The EUR/USD ultimately had a major down day on Thursday wiping out recent gains in one strong session.
- Spanish 10-year bond yields have dropped from a euro-era high point as Francois Hollande (the French PM) advised policy makers are now looking into letting a fund buy debt from struggling Euro-zone nations who have accommodated fiscal-consolidation measures. 10-year yields dropped almost half a percent during the week to 6.38% yesterday.
- The latest COT report data from the CFTC has the EUR FX at a net -141,066 contracts and up from the previous weeks –195,187 reading. This comes as the key large speculator group moves away from record bearish low positioning levels hit during the start of June. The report does not capture the strong bearish price action seen during the later part of the week.
- The dollar index climbed over 1% on Thursday. A significant technical development as it takes price over key previous resistance once again.
- From a technical perspective; price came within close range of the 1.2500 round number on Friday before experiencing a minor corrective recovery (possibly as traders closed positions at the weeks end).
- Any upside move may encounter further resistance around the 1.2625 level which has proved to be a horizontal pivot area in the past.
- The 38.2% Fib retrace is our next focus, on any move above the aforementioned pivot. This held price lower on multiple recent occasions.
- To the downside there is the 1.2500 psych level and a sustained move below this area could potentially see an attempt on the multi-year EUR/USD lows.