EUR/USD Dec. 16 – Holding on to Low Support

EUR/USD is holding on to low support after the long decline, ahead of the EU summit. It’s a very busy day today – lots of action is expected. Here’s a quick update on technicals, fundamentals and community trends.

Euro/Dollar breaking higher.

EUR/USD Technicals

• Asian session:  Quiet session after the big decline -narrow range 1.32 to 1.3230.
• Current Range between 1.3180 to 1.3267.
• Further levels in both directions: Below    1.3180, 1.3114, 1.30, 1.2920, 1.2722, 1.2587.  Above 1.3267, 1.3334, 1.3576,  1.37, 1.3786,  1.3950 and 1.4030.
• 1.3180 proved to be strong support.
• 1.3440 is important resistance above and remains as such after a breakout attempt failed.

EUR/USD Fundamentals –

• 8:00 French Flash Services PMI. Exp. 55.4 points.
• 8:00 French Flash Manufacturing PMI. Exp. 57.8 points.
• 8:30 German Flash Services PMI. Exp. 59.1 points.
• 8:30 German Flash Manufacturing PMI. Exp. 58.2 points.
• 9:00 European Flash Manufacturing PMI. Exp. 55.3 points.
• 9:00. European Flash Services PMI. Exp. 55.3 points.
• 10:00 European CPI. Exp. 1.9%. Core CPI, exp. 1.2%.
• 13:30 US Unemployment Claims. Exp. 421K.
• 13:30 US Current Account. Exp. -126 billion.
• 13:30 US Building Permits. Exp. 570K.
• 13:30 US Housing Starts. Exp. 550K.
• 15:00 US Philly Fed Manufacturing Index. Exp. 14.8 points.

* All times are GMT.

For the major events due later in the week, see the  EUR/USD outlook

EUR/USD Sentiment

• There are hopes for a wide solution to the European debt crisis in the European summit – perhaps a permanent bailout mechanism. This is one of the  5 reasons for the Euro rally. The European summit begins today.
• Spain is under the limelight as Moody’s warns of a downgrade. This hurt the Euro at the beginning of the session.
• Spanish bonds yields are already eased to 5.45%.
• The Irish parliament approved the bailout plan as expected.
• US bond yields boost the dollar – they passed 3.50% yesterday. This mostly affects USD/JPY, but also EUR/USD.
• Currensee Community: 51% are long , 49% are short. These are 1233 open positions in real accounts trading this pair at the moment.

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