By Russell Glaser
The EUR and equity markets have come off of their lows though sentiment remains fragile and any potential rally in riskier assets may only prove to be temporary. With US markets closed for the Thanksgiving holiday flows will be on the lighter side today. Today’s highlight will be the meeting between the three leaders of Germany, France, and Italy. There may be a possibility for a EUR rally going into the weekend should German PM Angela Merkel signal her willingness to compromise.
Today, investors will be focusing on the meeting between Merkel, Sarkozy, and Monti. Perhaps this will be a prelude to the key Dec 9th European Council Meeting. The three leaders of Germany, France, and Italy are expected to hold a press conference at 13:00 GMT today. Should Merkel signal a more open minded approach to euro bonds or additional ECB involvement, EUR shorts could get squeezed going into the weekend. Strict risk management would be a necessity in this situation.
EUR/USD support is at yesterday’s low of 1.3320 followed by the October low of 1.3145. Resistance comes in at the base of the consolidation pattern from the November 17th low at 1.3430 and at 1.3610 from the November 18th high.