Forex: EUR/USD at lows after Spanish auction

FXstreet.com (Barcelona) - The market plunged from 1.2775 area on rumors that Spain is not getting aid from the ESM any time soon nor the ECB is particularly interested in launching the OMT buying in a hurry. Such events should only take place in 2013. The EUR/USD fell more than 50 pips to 1.2723 low, extending the losses seen yesterday.

Meanwhile, the Spanish government sold a total of €4.763B out of a €3.5-4.5B target of 2015 (€0.992B at 3.660% - previously at 3.956%), 2018 (€3.04B at 4.680%) and 2032 (€0.731B at 6.328%) bonds. The cross is at 2-month lows since it trades below 1.2755 (September 10 low). The EUR/USD is looking to extend further, below 1.2723.

“Yesterday's sell-off bottomed at 1.2737 and current rebound should be considered corrective, preceding next slide to 1.2680-90”, wrote Deltastock analyst Stoyan Mihaylov, pointing to resistances at 1.2785 and 1.2830. “Crucial for the whole downtrend from 1.3139 high is already 1.2875”, he added.

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