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Forex: EUR/USD supported by 1.2870/80

FXstreet.com (Barcelona) - The bloc currency plummeted to the area of 1.2875/80, where the 200-day moving average helped to contain the selling pressure. The comments by Papadoloulos regarding the likeliness of an exit of Cyprus have intensified the downside, coupled with market chat citing that an Italian downgrade would be in the pipeline.

Chritopher Vecchio, Currency Analyst at DailyFX, commented, “Concerns of a bank run are warranted in my opinion, and the spill over to sentiment in other European countries is inevitable… As we saw in June 2012, the bailout of Spain’s banks only produced three days of upside in the Euro – I would be shocked if serenity persisted past Wednesday".

At the moment, the cross is down 0.60% at 1.2884 with the immediate support at 1.2857 (low Mar.20) ahead of 1.2844 (low Mar.19) and finally 1.2827 (low Nov.22).
On the upside, resistance levels line up at 1.3107 (high Mar.15) followed by 1.3135 (high Mar.8) and then 1.3163 (high Feb.28).

Forex: EUR/JPY falls below 120.00 to test 121.40

The Euro is trading lower following the Cyprus hangover and the news regarding euro leading would be thinking to use the Cypriot resolution as financial template for the rest of Europe. In addition, another new talk on Italian downgrade has hurt, even more, the single currency.
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Forex Flash: EUR/USD selling by asset managers halts after 5 straight weeks – UBS

Within the G3, the euro was the weakest performer last week as the situation in Cyprus unsurprisingly led to continued outflows, though not at an accelerated pace. It appears investors were anticipating some form of resolution in any case, even though it would likely be at the eleventh hour or beyond. According to Research Analysts Gareth Berry and Geoffrey Yu at UBS, “Hedge funds led the selling while private clients also stepped up liquidation.”
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