EUR/USD

Current level - 1.2687

Today's low at 1.2641 is practically a test of 1.2624 support area on the senior frames and there is a chance for a reversal, which should provoke a larger consolidation rebound towards 1.2815 and 1.2910. The intraday outlook is slightly positive above 1.2670 support and a break above 1.2735 will clear the way for 1.2815.

Profit-taking affects gold curbing silver and platinum

EURUSD

Short-term downtrend off 1.3282, 01 May peak, remains unobstructed, with few minor consolidations and acceleration of losses after break below 1.3000 range floor. Series of negative news form the Eurozone keep the pair under pressure and are the main driver. Break below psychological supports at 1.2800 and 1.2700, as well as longer-term bull trendline, connecting 1.1875 and 1.2622 low at 1.2754, has cleared the way towards our main target at 1.2622, 13 Jan yearly low. Break here and weekly close below this point would be signal for further weakness. Technicals on both, lower and larger timeframes, remain negative, with initial barrier at 1.2740/50 zone, 16/17 May consolidation range top / 20 day EMA, while only regain of significant barrier at 1.2900 zone would provide relief.

EURO

Moving to the daily graph, the pair has ignored the oversold readings appearing on Stochastic resuming the bearishness. Now, the pair becomes very close to 100% Fibonacci retracement of the upside rally from 1.2625 to 1.3485 and a break of which will bring panic sell-off actions over intraday basis. Ultimately, focus should be now on the psychological level of 1.2500.

Market Brief

Market sentiment is highly bearish across the board as Moody's investor services confirmed the downgrade of 16 Spanish banks, and Fitch downgraded Greece yesterday from B- to CCC. The degradation of the rating should not have impacted because Greece was already considered junk at its previous level. Safe haven USD index continued its climb to a four month high at 81.71, EUR hit its four-month low at 1.2655, AUD declined beyond it 5-month low to 0.9795, and the S&P GSCI commodities index extending losses to 2.2% over the year. The uncertainty emanating from the Greece situation is therefore holding investor

As this week has come to an end, negativity seems to be deepening in markets, where the sentiment continued to deteriorate after Fitch downgraded the Greek credit rating by one notch, while Moody's cut the ranking of 16 Spanish banks, the thing that sent European main equities to 2012 fresh lows, while weighing sharply on the European common currency ahead of the G8 summit today.

Fitch Ratings downgraded the credit ranking of Greece by one notch to CCC from B- on concerns the nation might have to leave the one-currency bloc amid the current political instability and the split over the second bailout deal and the austerity associated with this financial aid provided by International Lenders.