The shared currency seems absolutely revitalized as of yesterday, quickly leaving behind the pronounced knee-jerk at the beginning of the week, later concerns about the sustainability of Greece's debt and the uncertainties derived from the country's ability to implement the necessary measures to meet its fiscal target in the future.
Yes, it's true-- the evident EUR/USD strength came once more from external factors, this time via a weaker dollar, after upbeat comments by Republican Party member J.Boehner regarding the so-called U.S. 'fiscal cliff', have renewed hopes of a solution in the near term. That was it all. Traders now seem to have put the bear toy back in the box, and they have started to think again in the 1.30 figure, rather than the key support in the vicinity of 1.28. The later release of the Fed's Beige Book proved to be once more a non-event, eclipsed by the upbeat tone that was involving the markets by that time.
… So, is the bearishness neutralized then?
It may appear to be too soon to talk about a change in the late bearish trend, mainly when the cross is still trading below the key barriers in the region of 1.3020, where a breach is required to aspire to higher ground in the proximities of 1.3170 (September tops), thus opening a greater possibility of sparking a bull market.
Of course, plotting against any attempt of a long-lasting bull run remains the fragile economic situation in the eurozone, and what is even more worrisome, the outlook towards the last quarter does not look good either.
In the opinion of expert Karen Jones at the German lender Commerzbank, the cross "has not maintained its initial break below the 55 day MA at 1.2918 and may need to consolidate further very near term. We view the recent high at 1.3010 as an interim peak as the market has recently charted a key day reversal and a TD perfection set up - both imply that the market has recently topped".
… Interesting docket on Friday
German Retail sales will inaugurate the eurozone calendar, followed by French Consumer Spending and Producer Prices, ahead of the preliminary readings of Spanish, Italian and EMU inflation for the present month. Later on, unemployment in the euro bloc is expected to raise a hair to 11.7% from 11.6%, in the same direction of Italian jobless rate, 10.9% exp. vs. 10.8% previously.
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