EURUSD Analysis News And Forecast – 26th June
- Spain has now formally requested funds for its deeply troubled financial sector today. Yields in Spain have moved to the upside but remain under the June monthly highs.
- Further to this the ratings agency Fitch has downgraded Cyprus to junk status; Cyprus has subsequently requested financial assistance from other eurozone nations. It is not yet clear whether this is for a government bailout or to recapitalize the banking sector as is the case with Spain.
- Moody’s has likewise downgraded the Spanish banking sector. They have now cut long-term debt and deposit ratings associated with 28 of the Spanish banks by one to four notches.
- From a technical perspective the EUR/USD has seen price move as low as 1.2471 during early trading and is currently consolidating around the 1.2500 handle which would be a lower close on the daily basis.
- Price is moving closer again to the to multi-year lows printed in recent weeks. Positive economic data from the US has seen little impact as May New Home Sales had risen to 369K; this came in stronger than the consensus figure of 347K.
- The market is firmly focused on the Eurozone crisis and the EU summit scheduled for later this week on Thursday and Friday. Any developments around the region’s debt crisis situation could see a boost for the 17 nation currency.
- We will be monitoring price action around the 1.2500 handle as order flow could potentially be building around this key area for the euro/dollar.