Forex: EUR/USD ends the week above 1.2700

FXstreet.com (Córdoba) - After hitting a 2-month low of 1.2660 on Tuesday, the euro managed to stage a recovery and is poised to close the week with mild gains against the dollar for first time in 4 weeks. However, as the former bottom of the range at 1.2800 is acting now as resistance, the downside remains vulnerable for EUR/USD.

On Friday, the dollar strengthened on safe-haven demand amid jitters regarding the US fiscal cliff talks, but as US leaders seem open to a deal risk appetite improved during the American afternoon.

At time of writing, EUR/USD is quoting at the 1.2725 area, just below its 100-hour SMA and only 20 pips above its weekly opening price, having bounced form a daily low of 1.2690.

Meanwhile in Europe, nothing was resolved this week and focus now shifts to the upcoming Eurogroup meeting next Tuesday.

"Considering that the single currency managed to move higher yesterday in the aftermath of the confirmation that it is in an official recession, we are clearly in an environment where fundamentals have taken a back seat", the TD Securities team commented. "For EUR/USD the downside level to watch is Tuesday's low of 1.2662, while the key topside level is marked by the 200-day MA near 1.2810".

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