FXstreet.com (Barcelona) - The EUR/USD remains in standstill mode at 1.2900 surrounding area, with some testing of 1.2886 zone in the mix, as the market trades quite high on the day (+0.36%) and might be worn out from overbought conditions. However, high expectations in regard to the FOMC meeting help the pair to find buyers.
Also risk positive is the bond markets’ reaction to the German Constitutional Court ruling in favor of the ESM that triggered a decline of the Spanish and Italian yields on the secondary market. The Spanish and the Italian 10-years are down to 5.65% and 5.05%. The Spain/Germany and Italy/Germany 10-year spreads narrowed by 250bp and 190bp during the summer.
Meanwhile in the US, wholesale inventories rose by 0.7% in July, above +0.2% consensus, and following a -0.2% decline in June. EUR/USD has eroded the 200 day ma at 1.2832, and the 2012 resistance line at 1.2840, this suggests further near term gains are likely towards initially 1.2974/1.3004”, wrote Commerzbank analyst Karen Jones.
Also risk positive is the bond markets’ reaction to the German Constitutional Court ruling in favor of the ESM that triggered a decline of the Spanish and Italian yields on the secondary market. The Spanish and the Italian 10-years are down to 5.65% and 5.05%. The Spain/Germany and Italy/Germany 10-year spreads narrowed by 250bp and 190bp during the summer.
Meanwhile in the US, wholesale inventories rose by 0.7% in July, above +0.2% consensus, and following a -0.2% decline in June. EUR/USD has eroded the 200 day ma at 1.2832, and the 2012 resistance line at 1.2840, this suggests further near term gains are likely towards initially 1.2974/1.3004”, wrote Commerzbank analyst Karen Jones.
