Closed in NY at $1.25439, off pressured lows of $1.2532. Risk suffered through the European-NY session as market was made aware of the later action by Moody’s to downgrade 15 major financial institutions, position adjustment ahead of initial Spain bank audit results (full audit results only due in Sep) and Goldman Sachs putting out a short S&P recommendation. EUR/USD continued its recovery into early Asia, as markets viewed the Moody’s action as not as bad as it could have been, as well as the initial Spain audit showing bank needs around expected levels and well off the E100bln that could be allotted. Rate settled between $1.2552/62 through the Asian afternoon, opening Europe around $1.2558. Resistance seen into $1.2580 ahead of $1.2600/10 and $1.2650. Support remains between $1.2540/30, the area covering the Asian base at $1.2540, 21-dma at $1.2534 and the NY low at $1.2532. A break to allow for a deeper move toward $1.2520, with bids from here seen strengthening toward $1.2500 ($1.2508 76.4% $1.2435-1.2744), stops below. Germany Ifo 0800GMT; Ecofin and heads of state meeting in focus.
EasyForexNews Research Team