Euro Decides To Hold Back For Direction

The single currency fell back again on the sidelines of an EU summit which is illustrated again by his lack of response to current tensions, despite the willingness of leaders in the region to strengthen fiscal discipline.

All the countries of the European Union except the UK and the Czech Republic, adopted in Brussels the introduction of golden rules and agreed on the European Stability Mechanism (MES ), which has 500 billion euros in 2013 will replace the current EFSF. Although this is a step towards greater fiscal discipline, the imminent risk of a subsequent default of a member of the eurozone is not removed, now the attention of investors on negotiations the situation in Greece and Portugal.

While an agreement between Athens and its private creditors was expected over the weekend, after a new offer of the International Institute of Finance on the rate of new bonds, the bitterness intensifies talks this week and tensions are growing even among the Hellenic Government and Berlin.

Despite the easing of European bond markets, where rates in Spain are broken below the 5%, the rates for their Portuguese reached 16% to a record, highlighting, in the wake of Greece, risk of a debt restructuring of the country.

Finally, the rating agency Fitch has not hesitated to break down in turn five Euroland countries, including Spain and Italy next targets of the operators in case of spread of the crisis.

Thanksgiving Gives The Euro A Break

The single European currency settled during “Thanksgiving” on the U.S. side and after a slump for nearly $ 1.42 on 27 October. The euro and gleans 0.41% to 1.3401 dollars, after a low of 1.3320 in recent days.

Indeed, the operators put some hope in the mini-summit Mario Monti, Angela Merkel and Nicolas Sarkozy in Strasbourg today. ‘It should be discussed measures to rescue the euro area such as the increased role of the ECB, the strengthening of the EFSF or the creation of eurobonds, which would pool the debts’, says Barclays stock.

Furthermore, in terms of economic data, the German GDP has increased by 0.5% in the third quarter, confirming Thursday the Federal Office of Statistics. In addition, investors are smiling to the business climate in Germany, which has recovered in November, according to the Ifo Institute’s index, for the first time in four months. The Bureau of Economic Research, based in Munich, has in fact indicated that the index compiled from the responses of some 7,000 companies, stood at 106.6 this month, against 106.4 in October.

If the euro is recovering as 0.22% to 0.8614 against the pound, it remains stable at 103.1 yen and Swiss franc to 1.2291 euro.

These elements support a lull over a recovery on the currency markets, the environment remains a concern. The fact that a lifting of the West German bond has not been taken out at 100% yesterday, raises serious doubts about the heart of the Eurosystem.

Euro Technical Levels Review Of Last Week

The courses of the single currency resumed Thursday on the height expectations for release of the situation in Italy. But the meltdown of the day paved the way for a return of the lowest in October.

At 3:00 p.m. Thursday, the euro rose 0.8% to 1.363 against the dollar. The single currency was driven by expectations of unblocking the situation in Italy. Berlusconi said Thursday its support for the former European Commissioner Mario Monti, tipped to succeed him as head of the executive. At this announcement, the yield of the loan Italian relaxed a bit after a record high the previous day to about 7.4%. The rebound of the euro, however, appears very pale after the downfall of the previous day. The courses have indeed fallen by more than 2%. The trend is now clearly bearish in the short to medium term. In the short term, a major graphics support was broken. An admission of weakness that makes the threat of a return on the lowest from October to 1.316, ie, the current prices, a 3.7% gap. We remain negative below 1.387. In the medium term, parity is a vast third of the entire cycle of decline triggered the end of August. The downward trend started on October 28 should be of a magnitude less than that recorded between August 30 and October 4, about 10%. This would bring parity in its January low of around 1.29. Below, we would aim 1.262.