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Euro Approaches 1.3100 On European News

The euro advanced to a fresh 6-week high versus the dollar on Monday as financial markets begin the week in a constructive mood afterSpain formally requested a bailout to recapitalize banks and Greece launched a debt buyback.

However, market optimism was tempered by disappointing US manufacturing data. Even though US stocks opened higher, they gave up gains after a report showed US ISM manufacturing index fell into contractor territory.

For the week ahead there are several central bank monetary policy announcements and the US employment report, while investors will also be closely following the ongoing US budget talks.

Euro hits 6-week high, nears 1.3100

EUR/USD printed a 6-week high of 1.3074 during the New York session and was last up 0.5% at the 1.3065 zone. Technically speaking, the euro holds a short-term bullish bias, with 1.3080 level as the last hurdle on the way to 1.3100, with 1.3170 coming into view. On the other hand, the 1.3000/10 area should offer support.

"Fundamentally, there doesn't seem to be much that can hurt the EUR these days, with the single currency making marginal new highs overnight despite the EFSF/ESM rating downgrade after the close on Friday and not-so-great PMIs overnight", says the TD Securities team. "EUR/USD is now trading comfortably above 1.30, and continues to look positive from a short/medium/long term technical perspective".

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