The single currency is stillkeeping its retreating pace versus the greenback trading below 1.285 in thebeginning of the US session under the pressure of the second day of violentdemonstrations in Spain against the austerities measures ahead of the waitedparliament elections can be sooner than later looking the main reason ofdelaying the governmental official request for bailing out Spain.
The Spanish bonds yieldssurged again in the secondary market and the risk appetite came under pressurepushing up the greenback across the broad from another side with emergingworries about the debt crisis in Europe and the bad economic conditions inSpain which can be transferred to other debt ailing countries.
While the market focusing onSpain can be extended weighing down on the market sentiment and the euros as European commission's spokesman has announced earlier this week that itis not soon to deliver the first tranche of €100 billions of bailing out itsbanking sector as the European Commission will make its own analysis of thissector next month following the Spanish banking stress test results this monthas the European authorizationwas to release up to 30 billion euros of this plan from the EFSF or later fromthe ESM once the Spanish government finished its revision of its banking sectorto be recapitalized.
while Spain is still sending out very weak signs of its economy whichhas contracted y/y by 1.3% in the second quarter while the market was waitingfor shrinking by just 1% after dropping by 0.6% in the first quarter of thisyear with rising of its unemployment rate reaching 25% with strong increasingof its unemployment change by 38.2k in August.
From another side the single currency came under pressure as the Germancentral bank head and the ECB member Weidmann has chosen to not waste a chanceof criticizing the ECB' OMT plan saying that he is not the only to has doubtabout its efficiency. From another side, The ECB President Draghi has mentionedthat he has enormous respect for the Bundesbank and many ECB members which arehaving the same worries but this was the chosen way for calming down themarkets by the ECB which has seen in its decision of buying EU governmentalbond plan a bridge for a more stable future and he did not forget too to referto the governmental important role in the face of the crisis.
By God's will, in the case of easing back givingback more of its recent gains which reached 1.3170 in the beginning of lastweek, EURUSD can be met with another supporting level at 1.2749 which can be followedby 1.2605 which is the 50% Fibonacci retracement of the rising from 1.2041 to1.3170 before 1.2464 again while rising again from here can be faced 1.30 psychologicallevel before more resisting levels at 1.3047, 1.318 which could hold in theface of its recent rally while breaking it can open the door for 1.3282.1.3384before 1.3485 again whereas it has formed its lower high on 24th oflast Feb after forming a bottom at 1.2623 on 13th Jan of this year which came as an end of adown channel has started from 1.4245 on 26th of last October 2011.