While talks between Greek government and institute of international finance progress, eyes and hearts are fixated to the long lasting story of Greece debt resolution, although reports suggested that a deal between the bond-holders and government is imminent the euro took a hit by weak start, after ending the at 1.3219, the pair dropped sharply on Saturday to erase most of Friday's gains printing a low at 1.3109.
The jitters continue and market participant are anxious that today's euro summit well maintain its latest trend of disappointments, as at this juncture the euro leaders are to continue discussing the measures they suggested before about approving and signing a treaty to create the euro rescue fund (ESM) of 500 Billion worth of Euros effective by July, and maybe combining the fire power of the ESM with the EFSF creating a super fund of 750 billions Euros. Thus action shall boost the crisis fighting abilities and could improve the overall market sentiment. On the other hand failure to meet these expectations today could worsen the overall sentiment dramatically and could trigger a long lasting bearishness.
Failing to hold above key resistance at 1.3200 hinted the resumption of the downside pressure, however the pair continues to trade within the short term ascending channel, the area among 1.3090-1.3060 is a pivotal support in the near term , stability below this area again will open the door towards 1.2950.
Today Spain released its GDP figures for the 4th quarter of 2011, the economy contracted by 0.3% rate, which added more pressure on the euro this morning.
Risk related currencies slumped and the greenback bagged gains against its major counterparts, where the dollar index surged more than 50 points, after opening the trading session at 78.79 the index printed a high at 79.33 and currently pushing to the high (79.31).
Main economic releases for today are personal spending and inflation figures due to be released from U.S at 13:30GMT
The GBP/USD fell as well, printing a low at 1.5653 after opening the day 1.5733. First downside support is seen around 1.5620-1.5640 area, which is a confluence of horizontal support levels and the short ascending support that carried the pair from 1.5230 low, first resistance at 1.5700 followed by the high at 1.3735.
On the other hand the U.S dollar is underperforming against the Japanese yen, where its currently testing a major support level near 76.50 area after opening the session at 76.67. Breaching the aforementioned support could extend losses to 76.10 and 75.50. While trading above 76.77 may push trading higher to 77.00.