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Forex - EUR/USD extends gains amid caution ahead of EU summit

Published 07/20/2011, 07:19 AM
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Investing.com – The euro extended gains against the U.S. dollar on Wednesday, rising to a four-day high, but further gains were limited as investors remained cautious ahead of an emergency summit of euro zone leaders on Thursday.

EUR/USD hit 1.4184 during European early afternoon trade, the pair’s highest since July 14; the pair subsequently consolidated at 1.4183, gaining 0.19%.

The pair was likely to find support at 1.4013, Monday’s low and resistance at 1.4281, the high of July 14.

European Union leaders were to hold an emergency summit meeting in Brussels, aimed at addressing the region’s sovereign debt crisis.

Greek Prime Minister George Papandreou said euro zone leaders need to demonstrate that they can resolve Greece’s sovereign debt crisis to avoid a contagion to Italy and Spain.

Speaking ahead of the summit, German Chancellor Angela Merkel said Europe’s fiscal crisis can’t be solved in one go, saying further steps would be needed.

Meanwhile, in the U.S. President Barack Obama said Tuesday that there had been “some progress” in talks with lawmakers on raising the USD14.3 trillion U.S. debt limit, boosting optimism that a deal would be reached before the August 2 deadline.

The euro was also higher against the pound, with EUR/GBP rising 0.38% to hit 0.8813.

Later Wednesday, the U.S. was to publish industry data on existing home sales.

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