FXstreet.com (Córdoba) - The Euro came under strong pressure this week amid mounting debt and political concerns in the euro zone, and despite the shared currency managed to trim losses on Friday, is on track to register its third weekly loss in a row versus the Dollar.
EUR/USD bottomed out at a 5-week low of 1.3420 on Thursday but bounced up helped by reports suggesting the ECB could lend funds to the IMF for them then to be used to fund bigger euro zone economies and thus get around legal hurdles.
The European sovereign debt yields eased from recent highs as the ECB stepped in to stabilize the market, supporting the Euro. "In spite of less than impressive bond auctions from Spain and Italy, aggressive peripheral bond buying by the ECB via the SMP managed to offset some of the bearish sentiment and in turn prevent the pair from suffering larger losses", said the Talking-Forex.com team.
Yields on 10-year Spanish bonds fell back to 6.4% from levels above 7%, while yields on Italian 10-year bonds eased to 6.7%.
EUR/USD is about to close the day around 1.3500/20, 0.5% above its opening price, having retreated from a day's high of 1.3615 during the NY afternoon. On the week however, the pair lost 2.0%.
The Talking-Forex.com analyst team locates next supports at 1.3421 and then at the 21Day Lower Bollinger level at 1.3362. On the other hand, resistance levels are seen at 1.3641 and then at the 55DMA line at 1.3698.
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