The Euro found support from an upbeat German IFO Business Survey report which bettered forecasts and its previous read. EUR/USD closed just under the 1.0900 level at 1.0896. Overnight, the shared currency traded to a low of 1.08705 before steadying. The euphoria surrounding the Franco-German EUR 500 billion grant facility faded after the proposal was immediately opposed. Over the weekend, Austria, Denmark, Holland, and Sweden offered an alternative proposal but with conditions. The European Commission is expected to make its own proposal soon and will set the stage for negotiations between the heads of state.
EUR/USD has immediate resistance at 1.0915 (overnight high 1.09144) followed by 10950. The big resistance still lies at 1.1000 and that needs to break to see a fresh upside move. Immediate support can be found at 1.0870 followed by 1.0830. The risk is still lower with the market’s positioning long of Euros. Until that is corrected, the Euro is still a sell on rallies. We look at the latest market positioning on the shared currency tomorrow.
