The Euro refuses to budge too far from the recently struck 4-month low, and is finding it difficult to break through technical resistance. Analysts believe that additional selling might be limited ahead of the E.U. policy meeting which will take place beginning tomorrow, with hope being built that the leadership will agree to some measures that could provide a lift to investors’ confidence. As reported at 12:56 p.m. (JST) in Tokyo, the EUR/USD slipped to $1.2794, a 0.2% decline; technical resistance is seen at $1.2811. The Euro edged higher against the British Pound, off the recently struck 3½ year low of 79.505; more recently, the EUR/GBP pair was trading at 80.93.
Market participants say that they are containing their hopes of a positive outcome from the E.U. summit, believing that the pro-growth agenda that will be pushed by France and supported by Italy and Spain will not be embraced by the Eurozone’s paymaster, Germany, which continues to espouse austerity over growth. French President Francois Hollande is likely to propose again the possibility of a joint Euro-bond which Germany has not been in favor of previously, but the real question is whether or not Germany will at the very least soften their stance given the newfound and growing support in the Eurozone.