While the European markets will be waiting today for Sep services sectors PMI data and Aug EU retails sales by God's will, the Single currency is still taking its keys from the Spanish issue finding difficulty to reach 1.30 psychological level again versus the greenback following the Spanish PM comments which have shown that there is no close official request for the 100b euro bailing out plan of the Spanish banking sector showing that the market focusing on Spain can be extended after the market has been contained by an expectation of having this request in the beginning of this month after the better than expected stress test results which have shown the need for raising its banks capital by only 59.5b euro and the representation of 2013 budget by the end of last week which included 13 billion euro of cuts.

About the Spanish government financial reforms for sustaining its creditability, it has announced that it will target offering 207.7b euro of debt next year to drive the debt to GDP ratio to 90.5% and the deficit to GDP ratio to 4.5% cutting the public spending by 58% driving the average maturity of its debt to 5.8 years by God's will.

The EU Commissioner for Economic and Monetary Affairs Olli Rehn could calm down the market in the beginning of this week helping the single currency and restoring confidence in taking risk by flattering these new news from Spain looking for the official request to start bailing out the Spanish banking sector which can have better financial situation by the offered 100b euro currently while the European Commission is ready to make its own analysis of this sector once it has this request to release up to 30 billion euros of this plan from the EFSF or later from the ESM by God's will.

But from the economic side, the data which came from Spain were not encouraging enough as unemployment rate is still near 25% with 79.6k more out of the working forces in September after losing 38.2k in August to have 4.705m unemployed workers.

From another side, The markets will be waiting by God's will for the ECB meeting tomorrow with no expected surprising new decisions but their participants will be looking for having new clues about its recent outlined buying bonds plan from the press conference of its president Draghi who has mentioned recently that he has enormous respect for the Bundesbank and many ECB members which are having worries about it showing that was the chosen way for restoring confidence in the markets and the economy by the ECB which has seen in its decision of buying EU governmental bond plan a bridge for more stable future.

By God's will, EURUSD in the case of easing back giving back more of its recent gains it can be met by 1.2804 again which could hold in the beginning of this week and breaking it can open the way for a solider supporting area include its previous supporting level at 1.2753 and 1.2740 whereas the 38.2% Fibonacci retracement of the rising from 1.2041 to 1.3170 before 1.2464 again which meets also the 61.8% Fibonacci retracement of this same rising while creeping up again from here can be faced 1.30 psychological level before facing more resisting levels at 1.3047, 1.318 which could hold in the face of its recent rally which ended last month at 1.3170 while breaking it can open the door for 1.3282.1.3384 before 1.3485 again whereas it has formed its lower high on 24th of last Feb after forming a bottom at 1.2623 on 13th Jan of this year which came as an end of a down channel has started from 1.4245 on 26th of last October 2011.

Kind Regards

FX Market Strategist

Walid Salah El Din

E-Mail: mail@fx-recommends.com

http://www.fx-recommends.com

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