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Forex: EUR/USD volatile after touching 1.2880

FXstreet.com (Barcelona) - The EUR/USD touched 1.2880 again during the US session, and right after that move, orders triggered a spike down to 1.2829 low that was quickly retraced. Such volatility might have been provoked after reports that the EU Parliament wants to push for large depositors to face bail-ins. The EUR/USD is back at its highs again.

Markets have been digesting EU’s Dijsselbloem comments that uninsured deposits should contribute to bank rescue before taxpayers. ECB’s Couere replied to Dijsselbloem during the European morning, rejecting the idea that the Cyprus bailout is a new model for Europe, adding that there’s no reason to think French banks have the same problem as Cyprus. Also, he indicated that the troubles in Cyprus only show the need for ECB to be independent supervisor of banks in Europe.

US consumer confidence fell from 68.0 (revised from 69.6) to 59.7 in March (consensus of 68.0), while New Home Sales dropped from 0.431M (revised from 0.437M) to 0.411M (consensus of 0.422M). Richmond Fed manufacturing was also a disappointment, at 3 (from 6, consensus of 8). US S&P/Case-Shiller Home Price Indices rose from 6.8% to 8.1% in January, beating the 7.9% consensus.

“Monitor the test of the support at 1.2844. Another support is at 1.2662 (13/11/2012 low). Hourly resistances can be found at 1.2943 (intraday low) and 1.3048 (25/03/2013 high)”, wrote MIG Bank analyst Bijoy Kar.

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