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EUR/USD starting the week on steady ground

FXStreet (Barcelona) - EUR/USD is trading at 1.2681, up 0.09% on the day, having posted a daily high at 1.2687 and low at 1.2672.

After there being a fair bit of caution leading up to the weekend in respect of the European bank stress test, the result is that there are in fact no causes for real concern and results were remaining in line with the leaks from the media last week. Most critical is that none of Europe’s largest banks failed the test and only 13 banks need to raise a cumulative capital shortfall of just EUR9.47bn, a sum that is actually equivalent to less than 0.1% of nominal annual GDP. As a result, the euro is stable and remains above the pivot. We may continue to see some further support coming in for the euro as this result brings in some confidence back into the European banking sector. Focus now can turn back to Central bank considerations as we enter the years end. First up, the FOMC showdown and announcements on the 29-30th October this week.

EUR/USD sailing in rising tides

The US dollar ended last week on the back foot slightly as chips have been pulled back one by one from the table after an eleven week advancement across the board as we lead up to the FOMC. It is anticipated that the Fed will be ending the QE programme at this meeting. As much as the bull-run remains in tact though, and bets are placed for a continuation of that, it will be a nervous lead into the middle of this week and support and resistance levels are tight, with 1.2638 being the first key support should the greenback march on.

Noteworthy levels

Spot is presently trading at 1.2681, and next resistance can be seen at 1.2698 (Hourly 100 SMA / Daily Classic R1) and 1.2708 (Weekly Classic PP). Support below can be found at 1.2665 (Hourly 20 EMA / Pivot) 1.2638 (S1), 1.2606 (S2) and 1.2577 (S3).

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