European Union Leaders have agreed on on deal to save Greece from the debt problem but there is so far no detail about the plan yet. European Commission President Jose Manuel Barroso said in Brussels that EU officials reached an accord. European Council President Herman Von Rompuy said that Euro-area member states will take determined and coordinated action if needed to safeguard financial stability in the euro area as a whole. Also, he said that Euro aread members will fully support the efforts of the Greek government and their commitment to do whatever is necessary including adopting additional measures. However, it's so far unclear whether EU leaders will leave the summit today with a detailed package. Euro bulls are clearly dissatisfied for the moment and the common currency drops slightly against dollar and yen today.

Elsewhere, dollar remains mixed against major currencies after released of better than expected jobless claim report. Initial claims showed strong improvement to 440k. Canadian new housing price index rose 0.4% mom in December. Swiss CPI dropped less than expected by -0.1% mom in January and rose 1.0% yoy. German Whole price index rose 1.3% mom in January. Overnight, Aussie was buoyed by much stronger than expected job market report and rebound in Asian stocks. The job market in Australia expanded much more than expected by 52.7k in January versus expectation of 15.1k. Unemployment rate also unexpectedly dropped from 5.5% to 5.3%, added more evidence that it has well passed it's peak of 5.8% last August. Resilient in the job market solidifies the case for RBA to resume the rate hike cycle in Q2. Asian stock markets were also lifted by weaker than expected CPI reading released from China which rose 1.5% yoy in January, slowed from December's 1.9% yoy. The data cooled down speculation of further tightening after Chinese New Year. Nevertheless, investors are still conscious considering strong lending of CNY 1.39T, third-largest monthly total on record.

Recent retreat in dollar against European majors should prove to be corrective in nature and the greenback should set to resume recent rally after the consolidations. The choppy look in gold's recovery is also supporting this case and we're still expecting another fall in gold to 1000 psychological level. Similar outlook is found in yen crosses while more decline are expected after competing the sideway consolidation. Main question remains on Aussie which has been stubbornly strong. One should continue to avoid buying dollar against Aussie even in case of strong dollar rally.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3671; (P) 1.3741; (R1) 1.3807; More.

EUR/USD dips sharply today but is still holding above 1.3676 minor support. Outlook remains unchanged. Consolidations from 1.3585 is still in progress and another rise cannot be ruled out. But upside is still expected to be limited by 1.3852/4025 resistance zone and bring fall resumption. Below 1.3676 minor support will flip intraday bias back to the downside for 1.3585 low first. Break will target 61.8% retracement of 1.2329 to 1.5143 at 1.3404 next.

In the bigger picture, three wave rise from 1.2329 is treated as consolidation to fall from 1.6039 only and should have completed at 1.5143 already. Fall from 1.5143 is tentatively treated as resumption of the whole down trend form 1.6039 and should target a new low below 1.2329. Break of 1.4217 resistance is needed to be the first signal of medium term bottoming. Otherwise, outlook will remain bearish even in case of strong rebound.

EUR/USD