The Euro firmed above the recently struck 2-week low after Spain’s government revealed a 2013 budget that many believe is a move towards stabilizing its finances. The government announced as well a timetable for proposed economic reforms which was well received by E.U. leadership as above and beyond current requirements. Analysts believe that the Spanish government is setting the stage for a formal request for E.U. financial assistance. Later today, Moody’s may announce the downgrade of Spanish debt which may pressure the Euro further, but analysts say that likelihood has already been priced in for the most part.
As reported at 1:49 p.m. (JST) in Tokyo, the EUR/USD pair is trading at $1.2934, a small gain from the $1.2828 low struck yesterday; analysts say that the 200-day moving average is providing significant support. Initial resistance for the pair is pegged at $1.2960, a 38.2% retracement of mid-September’s fall. The pair is on track to close 2.1% higher for the 3rd quarter, buoyed primarily by the ECB’s pledge to help curtail borrowing costs among the E.U.’s troubled nations. Spanish and Greek concerns are still likely to weigh on the common currency in the near term.