The Single currency could get over its previous resistance at 1.3832 versus the greenback after Berlusconi could have the confidence in the Italian parliament and it is now heading to its previous resistance at 1.3935 which has been reached following the ECB's decision to offer US dollars loans for 3 months to the European banks earlier last month and if it could get over it, it is expected to face resistance at 1.4 psychological level before another resistance at 1.4147 by 1.4278 which has been reached by the SNB's action to limit the EURCHF drawing down over 1.2
While its way for getting back down versus the greenback can be met by God's will with supporting level at 1.3684 whereas it could rebound yesterday and breaking it can be followed by other supporting levels at 1.3562 , 1.3359, 1.3232, 1.3144 whereas the pair has started to rebound on the 4th of this month and get below it can face another supporting level at 1.3088 before the psychological level at 1.3 and breaking it can open the way for 1.2873 which has been the recorded low of this year on the 10th of last January.
The single currency could find this week strength, after Merkel and Sarkozy meeting last Sunday which has shown strong appreciation of the need for recapitalizing the European banking sector quickly for protecting it from deterioration in the case of further exacerbation of the debt crisis and this step can make the European banking sector the nearer to Basel 3 agreement which is expected to be implemented in 2019, as the European banks are widely expected to be asked for rising the capital by about 9% in few months and this adding can be by its earnings, the governmental sector or the private sector before asking for EFSF
From another side, the single currency could find support by the Greece creditors' troika statement which has shown a greater possibility of passing the waited 8 billions slice to Greece of its 110 bailing out plan by the EU Fin Ministers.
FX Market Strategist
Walid Salah El Din