By: Barbara Zigah
Hopes that the Eurozone’s leadership has moved closer to finding resolution to the debt crisis plaguing the region has given the Euro some support, though the single currency did slip lower versus the U.S. Dollar on some light profit taking. As reported at 12:01 p.m. (JST) in Tokyo the Euro was trading against the greenback at $1.3864, down from a Friday New York high of $1.3902. Analysts say that with the Wednesday meeting still ahead, the Euro is likely to hold in a tight range, moving sideways and above $1.3800. The Euro has held well off the 9-month low of $1.3145 struck earlier in the month and traders expect sentiment to remain positive with strong resistance looming at $1.3912 and $1.3915, the 55-day moving average and 1-month, respectively.
The division between the two largest and strongest of the Eurozone economies, namely Germany and France, underscores the difficulties faced; France has now backed off from earlier demands which called for the ECB to provide unlimited funds. Nonetheless, many believe that the resolution the markets have been waiting for may now be on its way. Details are emerging that the policy heads have drafted a plan for leveraging the EFSF and recapitalizing Eurozone’s banks.