Forex: EUR/USD jumping on Merkel's solution for Greece

FXstreet.com (Barcelona) - The EUR/USD is gently retracing the “risk off” plunge made during the Asian session as the market realized there would be no Eurogroup decision about Greece. They were delayed to November 26 meeting.

Having fallen to as low as 1.2737 following the tumble, the pair was able to retrace 50% of the decline and is now trading around 1.2775. Now, a wind of bids is taking the EUR/USD towards the 1.2800 psychological level as German Merkel pointed to lower rates and increasing EFSF guarantees by €10B as the solution to Greece's financing hole through 2016.

“EUR/USD is showing signs of failure at the resistance line at 1.2842 – we should see this together with the 55 day ma at 1.2903 hold the topside and provoke failure”, wrote Commerzbank analyst Karen Jones, pointing to support at the 1.2661 current November low.

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