FXstreet.com (Barcelona) - By yesterday afternoon, the EUR/USD had already shrugged off the disappointing PMI prints and poor results out of the German IFO series, helped by rumours of a leak in a draft of a MOU regarding Greece, speaking that the Hellenic Republic would be granted two more years to meet its commitments with the EU, and that the retirement age would now be 67 instead of 65 and the ratio primary surplus/GDP would be 4.5%, excluding interest costs. Furthermore, ECB’s Mario Draghi also performed well before the Bundestag. In essence this was the panorama ahead of the FOMC statement, although it has eventually proved to be a non-event, as it’s passed almost unnoticed among the market participants.

Moving forward, with that out of the way, euro bulls have resumed the previously interrupted upside, pushing the single currency to levels above the psychological 1.3000 mark against the greenback during the European morning on Thursday. Risk appetite has taken the relay from the Asian session, extending its momentum after the opening bell in London and acting as an extra support for this correction higher. An absent relevant calendar in the euro bloc just fuelled the trend.

Indeed, it seems that the euro would close the week orbiting around 1.3000, unless unexpected rumours or comments crop up and intervene either way. The US GDP figures to be released tomorrow might add some fireworks, although that wouldn’t be an euro factor, per se.

… Winds of change?

As every time a new threshold is trespassed, there’s the requisite need to know whether this event would be temporary, or it would propagate a new and stronger upward movement.

In the view of analyst Karen Jones at the German Commerzbank, EUR/USD rallies would find resistance at 1.3030/84 followed by the area at 1.3140/80. The expert also highlights that important support levels lie at 1.2890/36, and “a failure here would be viewed as psychologically negative, it should be noted that we are viewing the pattern more negatively, it looks more like a potential top than a continuation pattern at this stage”.

Senior Currency Strategist at Rabobank, Jane Foley, believes that Spain would be the main driver behind the price action of the cross in the near term, and she assesses “while the degree of any market tension over the weeks ahead will likely be calmed by the knowledge that the ECB’s OMT awaits, we see risks of pullbacks in EUR/USD potentially to the 200 day sma at EUR/USD1.2836”

According to the Bullish Percentage Index (BPI), developed by the research team at FXstreet.com, the current upside in the cross is consistent with a reading above the 50% threshold in the index, showing that more than 50% of euro-based pairs remains bullish. However, the bearish divergence between the BPI and some euro pairs still threatens the euro strength.

… Light docket awaits on Friday

The last trading day of the week wouldn’t carry any surprises, at least theoretically. US GDP Annualized figures for the third quarter would be the main focus, seconded by German import prices and the unemployment survey in Spain in Q3.