EUR/USD
The latest sovereign rating downgrade, this time of Spain by S&P, failed to materialise in significant deterioration in risk appetite and instead the price action resembled short-squeeze. Also, the move higher was aided by the perception that the downgrade will force the government to act faster and finally request monetary assistance. In terms of technical levels, supports are seen at the 200DMA line at 1.2822 and then at the 21DMA lower Bollinger line at 1.2791. On the other hand, resistance levels are seen at the 21DMA line at 1.2955 and then at 1.3035.
GBP/USD
The pair trended in tandem with EUR/USD for much of the session, and as a result settled higher as market participants remained hopeful that lawmakers in Spain will soon seek a full scale bailout to help it meet refinancing needs. In terms of technical levels, supports are seen at 1.5975/23 and then at 55DMA at 1.5915. On the other hand, resistance levels are seen at the 10DMA line at 1.6086 and then at the 21DMA line at 1.6152.
USD/JPY
The pair settled higher, as risk on sentiment remained the dominant theme for much of the session, which was in spite of the fact that Spain suffered another sovereign rating downgrade. In terms of technical levels, supports are seen at 77.19/44 and then at 77.23. On the other hand, resistance levels are seen at 78.76/88 and then at 79.00
