The EURUSD is ping ponging between support at the 200 hour MA and resistance at the 38.2% of the move down yesterday. Ironically, the rally has come post a rather weak German ZEW report that showed the current sentiment falling to 33.2 from 44.1 (expected 39) and the Economic Sentiment plunging to -16.9 from 10.8 last month (expected 2.3). Go figure.
The range for the EURUSD is a modest 62 pips . The price is starting the NY session above both the 100 and 200 hour MA (blue and green lines) giving a bullish bias (100 hour MA is at 1.2605, 200 hour MA is down at the lows at 1.25668 currently).
The bulls will take firm control with a move above the 38.2% at 1.2628 (will then become support). The next upside targets would be
- 1.26506 (midpoint of the weeks range),
- 1.2667 (38.2% of the move down from May 1 and other tops in June),
- 1.2684 (underside of the broken trend line. See chart above)
On the downside, if the sellers are able to overtake the buyers, the price needs to get back below the 100 hour MA at the 1.2605 level. The price would then enter between the “goal Posts” as defined by the 100 and 200 hour MAs. The close from yesterday and 200 hour MA at the 1.2573 and 1.2566 respectively will be the next key targets.
Meanwhile in Cabo, Mexico G20 leaders are meeting a scheming the next attempt of aid to patch the next hole. The BRICs contributed more dough to the IMF fund. Spain meanwhile issued 1 year and 18 month bills at 5.074% and 5.107%. This is up from May when the country issued 12 months at 2.985% and 18 month at 3.302%. Quite a leap in borrowing costs which is not sustainable if budgets are to be balanced. The 10 year yield on Spanish debt is down to 7.08% from 7.16% at the close yesterday (high around 7.23%). It was down at 6.088% on June 7th when the EURUSD closed lower at 1.2498. Go figure.