The Euro managed to hold onto another day of gains despite the G8’s somewhat tepid assurances to continue to work towards a resolution for the Eurozone sovereign debt crisis. World leaders said that they will work to ensure Greece remains in the Eurozone and simultaneously work to revitalize the global economy. Political analysts have generally dismissed the G8’s assurances saying that it was primarily talk and of little substance.
As reported at 12:43 p.m. (JST) in Tokyo the EUR/USD was trading at $1.2799, a gain of 0.15% from Friday’s late trading in New York and nearly 1.2% higher than the 4-month low hit earlier on Friday. Currency strategists say that it was primarily moves to cover a record amount of shorts which helped the common currency hold onto the recent gains, but that the pressure for a longer term downward trend remains intact as the economic fundamentals are clearly lacking. What traders are watching for now is a break below $1.2624, which is seen as a major chart point and which, if broken, could push the Euro to lows not seen in nearly two years.
Safe haven currencies continue to trend higher as global uncertainty remains high; the U.S. Dollar Index last Friday struck a 4-month peak, while the USD/JPY pair was trading at 79.15 Yen.