{"id":23859,"date":"2011-09-15T06:02:02","date_gmt":"2011-09-15T10:02:02","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2011\/09\/15\/euro-bond-talk-prompts-eur-bid\/"},"modified":"2011-09-15T06:02:02","modified_gmt":"2011-09-15T10:02:02","slug":"euro-bond-talk-prompts-eur-bid","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/09\/15\/euro-bond-talk-prompts-eur-bid\/","title":{"rendered":"Euro Bond Talk Prompts EUR Bid"},"content":{"rendered":"

Source: ForexYard<\/a><\/strong><\/p>\n

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Despite the string of negative headlines coming from Europe the EUR has firmed as a renewed discussion of Eurobonds and the French\/German\/Greek conference call have markets responding in a positive way. The consolidation in the EUR may have some EUR shorts cutting their positions though price action is bearish in nature.<\/p>\n

<\/span>Yesterday European Commission President Jose Manuel Barroso stated that the Commission would soon be presenting options for Eurobonds backed by all of the EMU nations up to 60% with the remaining amount backed by individual states using their respective credit ratings. The idea for jointly issued euro bonds found support this morning from ECB board member Yves Mersch. Dow Jones quoted him saying the creation of euro bonds for AAA rated nations would be “the embryo of a stability-oriented fiscal union with an agency for debt management as is the case in larger countries.” The introduction of euro bonds has the support of the peripheral nations but German Chancellor Angela Merkel <\/a>said today it is, “absolutely wrong” for the creation of a euro bond. Also this month\u2019s ruling by the German Constitutional Court forbids the Bundestag from assuming liabilities from other sovereign states. Given Germany\u2019s opposition to euro bonds both from a political and legal standpoint, one must question how long the renewed euro bond chatter can support the EUR.<\/p>\n

The Sarkozy\/Merkel\/Papandreou conference call<\/a> also helped to support market sentiment with a joint statement affirming the nations\u2019 commitment to \u201cthe Greek economy to return to a path of lasting and balanced growth,\u201d as well as Papandreou determination to achieve Greece\u2019s budget targets. The statement also stressed Greece\u2019s place belongs in the euro zone but the statement by no means nullifies comments from within Chancellor Merkel\u2019s coalition<\/a> from those who believe Greece should be expelled from the EU, nor does it prevent Greece taking unilateral action to leave the EUM should it default <\/a>on its debt. <\/p>\n

Looking at the technical picture the EUR\/USD continues to recover from its Monday morning low of 1.3500 and a break of 1.3800 would encounter resistance at 1.3835 followed by an initial retracement target of 1.3900. While the EUR temporarily recovers the price action shows a distinct bearish flag pattern forming on the charts. Support from the chart pattern comes in at 1.3650 with additional support at the Monday low. <\/p>\n

Read more forex trading news on our forex blog<\/a>.<\/p>\n

Forex Market Analysis provided by ForexYard. <\/a><\/strong><\/p>\n

\u00a9 2006 by FxYard Ltd<\/p>\n

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading. <\/p>\n","protected":false},"excerpt":{"rendered":"

Source: ForexYard Despite the string of negative headlines coming from Europe the EUR has firmed as a renewed discussion of Eurobonds and the French\/German\/Greek conference call have markets responding in a positive way. The consolidation in the EUR may have some EUR shorts cutting their positions though price action is bearish in nature. Yesterday European … <\/p>\n

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