Euro dollar rose to resistance on talks about a positive outcome for the EU Summit. This was dampened by fresh indicators showing a further slowdown in the euro-zone and a big confusion about the details of the agreements, and it now seems that a Greek default is going to be agreed by the leaders. Details are still emerging. This is the key for the pair’s movements. We have some US data as well, on this exciting day. Here’s a quick update on technicals, fundamentals and what’s going on in the markets. EUR/USD Technicals Asian session: An active session saw the pair jump to resistance at 1.4282, as an agreement between Germany and France was reported. Current range 1.4160 to 1.42. Further levels in both directions: Below 1.4160, 1.4120, 1.4070, 1.3950, 1.3838, 1.3750. Above: 1.4200, 1.4282, 1.4375, 1.4450, 1.4550. 1.4030 is a significant support line below. The other lines are minors. 1.42 is a more important line on the way up, with 1.4282 being the most significant barrier. Euro/Dollar sliding lower – click on the graph to enlarge. EUR/USD Fundamentals 7:00 French Flash Services PMI. Exp. 55.8. Actual 54.2 points. 7:00 French Flash Manufacturing PMI. Exp. 52.3 points. Actual 50.1 – On the verge of contraction – EUR/USD made the first retreat. 7:30 German Flash Services PMI. Exp. 56.1. Actual 52.9. 7:30 German Flash Manufacturing PMI. Exp. 54.1. Actual 52.1 8:00 All-European Flash Services PMI. Exp. 53.2. Actual 51.4. 8:00 All-European Flash Manufacturing PMI. Exp. 51.6. Actual 50.4. 8:00 European Current Account. Exp. -4.8. Actual -5.2 billion. 12:30 US Unemployment Claims. Exp. 409K. 14:00 US Philly Fed Manufacturing Index. Exp. +3.4 points. See how to trade USD/JPY with this event. 14:00 US Federal Reserve Chairman Ben Bernanke testifies. 14:00 US CB Leading Index. Exp. +0.4%. 14:00 US OFHEO HPI. Exp. +0.4%. * All times are GMT. For more events later in the week, see the Euro to dollar forecast EUR/USD Sentiment Confusion mounts towards the summit: At night, there were reports about an agreement between Sarkozy and Merkel following a 7 hour meeting. No details were released. And now, it seems that a Greek default will be part of the deal. This hurts the euro badly. The summit is officially expected to end with a statement during the European afternoon / American morning, at the peak of trading volume, but this may be delayed. Will we see a transfer union? QE in the Euro-zone: One solution that has less barriers and can bring immediate relief to the markets is that Trichet will go to the printing presses, and buy sovereign debt en masse. This would ease the pressure in the bond markets and would allow some growth. Global slowdown: It is not only Europe that showed signs of slowdown earlier. Also China is in trouble, and may already see contraction in its manufacturing sector, according to HSBC. This adds on the euro’s pressures. US debt deal hopes: The bipartisan “Gang of 6” has made huge progress in reaching a political deal that will allow the US to shrink the deficit and the debt ceiling to be raised. If this is finalized, it would take one problem off of the US, and would help the dollar. Unconvincing stress tests: Friday’s stress tests were too good to be true, with only 8 failures out of 90 banks. Indeed, some banks’ capital was based on assumption that they would have raised this capital, and not on existing capital. Is this serious? Contagion rages: Spanish 10 year bond yields are too comfortable above 6%. Italian yields for 10 year notes eased to 5.80%. These are very high levels. Spain already paid a higher price for 12 and 18 month debt it issued this week. On the same day of the summit, Italy and Spain will test the markets with fresh bond auctions, with Spain issuing 10 year notes . Are Spain and Italy up next for a credit downgrade? Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. EUR/USD Daily share Read Next US Jobless Claims Move Up – Dollar Moves Down Yohay Elam 10 years Euro dollar rose to resistance on talks about a positive outcome for the EU Summit. This was dampened by fresh indicators showing a further slowdown in the euro-zone and a big confusion about the details of the agreements, and it now seems that a Greek default is going to be agreed by the leaders. Details are still emerging. This is the key for the pair's movements. We have some US data as well, on this exciting day. Here's a quick update on technicals, fundamentals and what's going on in the markets. 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