Last week, Unified European currency strengthened its positions. The pair EUR/USD showed considerable growth of 1.79% last Friday. This positive indicator was achieved due to the outcome of the European summit. Despite skeptical attitude to this event, leaders of the European countries were able to reach consensus and develop a number of important decisions on the key issues. EU leaders agreed to establish a unified agency for the whole European area to supervise banking sector and carry out recapitalization of the banks the expense of financial assistance funds. A pact was signed on promoting economic growth in Europe for more than one hundred billion euros. Another important decision, made by the leaders of the European countries, was the agreement to adopt urgent measures to reduce rapidly rising price of the government bonds of Italy and Spain which has already led to the reduction in cost of Spanish debt securities.
2. Important levels (Resistance and Support).
Positive surge led to the rapid growth in the pair EUR/USD to the level of 1.2693. If “bullish” sentiments for this pair prevail, the next resistance level will be at 1.2741. Important resistance levels will be: 1.2620, 1.2525 and 1.2406.
3. Best entry/exit points.
Considering current situation in the market, the most feasible scenario will be strengthening of the pair EUR/USD in the short-term. It is recommended to open buying positions at the level of 1.2635 with protective orders below 1.2580.
4. Supporting factors.
The positive outcome of the EU summit is the “red flag” which will push “bulls” to move ahead. Current positive news- is a good momentum for the market, especially in comparison with the “long lasting” negative news. However, we should not become careless. Debt crisis in Eurozone is a problem which could not be resolved during two- day meeting. There will a long and difficult process to achieve economic growth in the EU; however the fact that EU leaders were able to come to agreement on the issues that caused controversy earlier, gives hopes for a brighter future of the Unified European currency.