EUR Trading Outlook
The Euro (EUR) the market is rife with rumors of IMF bailouts for Spain after the IMF leader laGarde had meetings with Spanish officials overnight. These have been denied but the market managed to rally briefly as Greek exit polls showed more support for staying in the EU and Greek banks got access to ECB funding. Resistance was seen above 1.2400 and when IMF rumors were discounted the market fell back towards 1.2350.
The Euro (EUR) the deepening Spanish crisis is reaching a critical stage where the fate of the union is now in the hands of EU officials in the next few weeks. Spanish bond yields crept to 6.7% and analysts suggest the 7.0% level is where panic will enter the bond market and heavy selling may be seen. Focus is on the EU leaders for concrete action to bring some confidence back into the market. Fresh year lows near 1.2350 were seen before we stabilized.
The Euro (EUR) the rejection of the Spanish banking bailout by the EU is creating fresh selling in the Asian session Wednesday with a move to 2 year lows on the EUR/USD under 1.2500 opening up a move to 1.2300. EUR/USD is struggling to rally even on a technical level and there seems to be continued interest to sell even as we move into record short levels.
The Euro (EUR) the Spanish bond yields increased to 6.5% the highest since last November overnight as the risk of default increased as Spanish bank bailouts from Spanish government linked their fate together. The EUR/USD rally above 1.2600 was reversed quickly on news of the banking bailout request.
The Euro (EUR) news the Spanish Catalan state needed a bailout hurt sentiment and helped EUR/USD sellers break the 1.2500 barrier briefly but good support was seen underneath and we finished near opening levels at 1.2520. The EUR/USD opened up strong on Monday however as weekend polls showed the radical left in Greece were losing support and this is lowering the chance of Greece leaving the Eurozone.
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