EU Finance Ministers Announce EUR 30 Billion Available To Spain In July

The current risk aversion could contain investors again pushing the greenback up across the board. In the beginning of the US session while the sentiment towards the single currency remains dovish with no major change of the EU Finance Minister Stance of going forward for bailing out Spain with EUR100b will be directed mainly to the recapitalization of its banking sector. While the political stance is still not clear about the ESM and the use of its funds in the direct buying of bonds. The market continues to wait for the German parliament to vote on ratifying the ESM, which was supposed to be started in the beginning of this month.

However, there could be voting against it as this parliament always criticizes the direct bond buying by the ECB which will share as a supervisor and agent in the ESM EU finance ministers have announced that EUR 30b of the EUR 100b  will be released and available by the end of this month for Spain while Spanish government liability is still not clear to the markets. Markets are still waiting for the new company which will conduct managing the assets of the banks, which will be shored up by the European bail-out funds while the single banking supervisor is still under construction. Additionally, there is still no clear picture about the collaterals of these funds which will be for loans its maturities from 12.5 to 15 years.

The market will also be waiting for the recent Fed's minutes to be released tomorrow in order to know more about what was behind the recent Fed's decision of extending Operation Twist by 267.5%, keeping its same buying monthly scale at $44.4b to detect whether there is a possibility of taking more easing steps soon or not.

After EUR/USD broke its previous supporting level at 1.2255, which could stave off its recent fall to get back 1.2333 whereas it has managed to fall again it can meet now another supporting level at 1.2151 and the breaking of it too can open the way for 1.1876 again. The pair has rebounded forming its bottom on the 7th of June 2010 which drove the pair later to reach 1.4939 on 4th of May 2011. The pair ascended back and can be met by resistance level now at 1.2332 which can be followed by 1.2402, which has been forming supporting level previously before 1.2543. Its break can lead to 1.2693 which was reached following the recent EU summit before 1.2748 which was reached after the recent parliament elections in Greece again 3 weeks ago.

But the single currency failed to continue rising versus the greenback over it while crossing above it can be met by a higher resistance at 1.2822 before the psychological level at 1.30 which its breaking can open the way for more resisting levels at 1.3063, 1.3180 and this can be followed by 1.3281 which its breaking can open for into 1.3384 again before reaching 1.3489. However, it has formed its recent top and in the case of breaking 1.3489.