Markets were painfully slow throughout the U.S. session, with the closure of both the New York Stock Exchange and bond markets not helping to build any momentum in EUR/USD, which traded a tad firmer above 1.2950 -- courtesy of European bids -- from 1.2885 day lows. Nonetheless, 1.30 is still faced overhead -- a sign of an undefined market.
Looking forward, the worst of Hurricane Sandy seems to be behind us now, and both the NASDAQ and NYSE have announced they are intending to resume trading on Wednesday, October 31.
On the fundamental front, traders found no inspiration to move either euros or U.S. dollars, and focus now shifts to the EU Finance Meeting in Europe, with headlines on a two-year extension and prospects for the next tranche of aid to Greece as a risk event worth noting. Meanwhile, expectations to define the timing of a possible Spanish bailout stay very low.
Jamie Coleman, Founder at Forexlive, notes: "The single currency attempted to break the near-term downtrend at midday in New York after strong performance from European equities and a well-received Italian auction. We could not close the deal, however, and we've drifted back within the established 1.2885/1.2970 range. U.S. markets will be open tomorrow, though perhaps thinly-staffed, so we should be getting closer to normal, with any luck."
In the same article, FXWW Founder Sean Lee notes EUR is starting to look bullish: "This time last year, EUR/USD had a technically bearish event when the 50-day MA crossed the 200-day MA and the pair had a bearish trend for 12 months. Now we've had a bullish cross, and this could have a significant impact if macro funds decide to exit long-term short positions."
Analysts at Commerzbank, Lutz Karpowitz and Peter Kinsella, note EUR/USD remains in wait and see mode, although they predict "the lower end of the trading range in EUR/USD is likely to be the weaker one in the short term."