EUR on a Rise

The EUR rose on Friday on the back of higher stocks, but the single currency struggled to extend its short-covering rally Vs. the USD ahead of technical resistance, while options barriers also capped gains.
 
A 0.9 percent rise in European shares .FTEU3 helped support the euro, but its climb petered out around $1.2150, where options were due to expire later in the day.
 
That level also provided technical resistance, as the $1.2150-1.2155 area offered support during the euro's downward move in May. A break through $1.2150 this month opened the way to a fall to $1.1876 this week, a more than four-year low.
 
"Previously, when we've had a short covering rally in risk assets, and in an uptick in euro/dollar in particular, investors were very mindful of technical levels and the market was willing to sell into resistance," said Valentin Marinov, currency strategist at Societe Generale.
 
He added that the same thing was happening on Friday.
 
"Given the lack of economic data or events today, traders are using technicals to gauge market sentiment," he added.
 
By 0955 GMT, the euro EUR= was up 0.1 percent at $1.2120. Earlier in the day it rose as high as $1.2148 on Reuters data.
 
"Euro/dollar is approaching an important level at $1.2150 -- above that point could see the ongoing correction extend to the upside," said Dag Muller, technical analyst at SEB in Stockholm.
 
"Should we fail to take it out, the market could start to sell, and we can easily get back to those lows."
 
Market participants said $1.2135 was also in focus, roughly the 50 percent retracement of the euro's 200-2008 rally.

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