By Russell Glaser – London traders continued their assault on the euro following earlier gains in the 16-nation currency during the Asian hours. A key Fibonacci retracement may be reached before the end of today’s New York trading.
A weekend announcement signaling an agreement by Ireland to accept financial aid generated interest in the euro at the opening of the Japanese trading session. Ireland is set to receive a bailout package worth 85 billion euros from the EU and IMF.
This helped the EUR/USD climb to an intraday high of 1.3300. However, support for the euro quickly faded as the European markets opened and the pair fell to its lowest level in three months. The EUR/USD is currently trading at 1.3170. Weakness in the euro was felt against the Swiss franc with the EUR/CHF trading at 1.3180, down from an opening day price of 1.3280.
The Irish acceptance of bailout funds reduces some pressure on the indebted nation that stems of the government’s decision to guarantee failing Irish banks. But questions still remain how the Irish political landscape will look with the threat of a crumbling government coalition.
Other European nations also remain susceptible to rising national debts. The nations of Portugal, Spain and Italy are amongst the larger EU members with staunch fiscal problems. Recent headlines show EU institutions are attempting to convince Portugal to accept bailout funds before another financial crisis erupts in Europe.
A lack of economic data on the calendar should leave the European debt crisis firmly in the spotlight during today’s New York trading session. Further euro weakness may be seen as a breach below the support level from September 19th at 1.3160 could propel the EUR/USD lower to the 50% retracement level of the June to November move at 1.3080.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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