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26 Mar 2013
Cyprus continues to cap any EUR progress
FXstreet.com (Barcelona) - The bloc currency remains trapped around the proximity of the 200-day moving average on Tuesday, flat-lining in a wait-and-see mode against the backdrop of increasing fragility in the Cypriot front. At the moment, seems that both capital controls and the final levy on deposits above €100K would dominate the headlines in today’s session, as the re-opening of the local banks on Thursday looms.
… Fears of contagion on the rise
The inaction seen in the EUR/USD since 2013 lows on Monday around 1.2830 has extended overnight alongside the lack of news emanating from Cyprus. Furthermore, that scenario remained pretty much unchanged into the European open, as markets seem to favour the isolation against the ongoing rumours that have been dominating the price action as of late.
Nonetheless, the D-Day in Cyprus would definitely be Thursday, when the banking sector meant to re-open its doors to the public. The subsequent reaction of both depositors and banks would be under the microscope, as well as any echo on the Spanish and Italian debt markets – the next victims?.
Anyway, investors’ confidence remains badly hurt and it is posed to keep on taking the brunt of further (surely unpleasant) events in Cyprus. Furthermore, market participants continue to be vigilant, paying close attention to comments by EU and Cyprus’s officials after yesterday unfortunate declarations of Eurogroup’s J.Djisselbloem. After all, words rather than facts have been the main drivers since the crisis in the island aggravated.
In the technical field, the cross returned to trade within the downtrend channel set from February highs, after the attempt to follow through the psychological limestone of 1.3000 on Monday did not prosper. It meanders around the 1.2870/80 region, home of the 200-day moving average and December 2012 lows.
Initial north barrier sits around 1.3075 – Fibonacci retracement of 38.2% of July’12 – February’13 upside – ahead of 1.3107 (March 15th high), If strong impulse persists, then 1.3134 (March 8th high) would be exposed.
Further downside however would expose the region of 1.2660/80, home of the November lows and the 61.8% retracement.
… Fears of contagion on the rise
The inaction seen in the EUR/USD since 2013 lows on Monday around 1.2830 has extended overnight alongside the lack of news emanating from Cyprus. Furthermore, that scenario remained pretty much unchanged into the European open, as markets seem to favour the isolation against the ongoing rumours that have been dominating the price action as of late.
Nonetheless, the D-Day in Cyprus would definitely be Thursday, when the banking sector meant to re-open its doors to the public. The subsequent reaction of both depositors and banks would be under the microscope, as well as any echo on the Spanish and Italian debt markets – the next victims?.
Anyway, investors’ confidence remains badly hurt and it is posed to keep on taking the brunt of further (surely unpleasant) events in Cyprus. Furthermore, market participants continue to be vigilant, paying close attention to comments by EU and Cyprus’s officials after yesterday unfortunate declarations of Eurogroup’s J.Djisselbloem. After all, words rather than facts have been the main drivers since the crisis in the island aggravated.
In the technical field, the cross returned to trade within the downtrend channel set from February highs, after the attempt to follow through the psychological limestone of 1.3000 on Monday did not prosper. It meanders around the 1.2870/80 region, home of the 200-day moving average and December 2012 lows.
Initial north barrier sits around 1.3075 – Fibonacci retracement of 38.2% of July’12 – February’13 upside – ahead of 1.3107 (March 15th high), If strong impulse persists, then 1.3134 (March 8th high) would be exposed.
Further downside however would expose the region of 1.2660/80, home of the November lows and the 61.8% retracement.