EUR Trading Outlook (06-12-2012)

The Euro (EUR) hit day highs in Asia near 1.3125 before reversing back below 1.3100 in Europe on USD strength given a weak Spanish Debt auction ahead of today’s ECB meeting. The ECB is forecast to hold at 0.75% but focus will be on President Draghi’s Speech. Support was found at 1.3080 and the uptrend still remains in place. The Sterling (GBP) remained at the 1.6100 level in very tight range which is unusual for the Pound which usually trades in a 100 pip+ daily range. The BOE meet tonight to discuss UK interest rates and are widely expected to keep rates at 0.5% and the asset purchase program at 375bn. Looking ahead, ECB Interest Rate Decision forecast to hold at 0.75%. BoE Interest Rate Decision forecast at 1.0% previously.