It was a tricky day to trade the EURUSD . Trading seemed clear enough to start the day in Europe. Spanish Prime Minister Mariano Rajoy suggested that he would consider requesting support from the euro zone's bailout fund. This was a step forward for Madrid who had up to this point ruled out the possibility of asking for support. Mr. Rajoy declined to specify Spain's course of action before the ECB provides more information about the European Financial Stability Facility and the euro zone's temporary rescue fund. This places the ball back in the ECB's court after European Central Bank Presidient Mario Draghi Thursday said the ECB is ready to resume government bond purchases, but only after a government makes a request to the euro zone's rescue funds and accepts conditions. Now all that is necessary is for the ECB to hammer out the details with Germany. Which off course will be a difficult trick to perform.
Trading became a bit cloudy after the release of the NFP report which was better than expected. Thus diminishing the expectations of QE in the short-term from THE USA. This is when the tug of war began. A stronger NFP should have translated into a stronger dollar as it did in the USDJPY. But with two stories competing Draghi won out once again.
From a price action point of view the EURUSD looks to be set to close near the highs of the week around 1.24. The cross is now above support at 1.2330 and past trend line resistance at 1.2280. Any move back down to the 1.2280 level could attract buyers. A break of 1.24 exposes 1.25.
Sup 1.2330 1.2285
Keane Insight: Any move back towards past trend line resistance at 1.2285 could find buyers. Could gap higher over the weekend with positive EUR news.
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