Hirose News, July 2
<Euro/Dollar>
Because of Spain's debt issue and European financial problems in general, the euro fell against the greenback after failing to establish above 1.2750 and forming a triple top. If a break below 1.2400 happens, the euro may even break through the lows at 1.2286 to 1.2000. The market is ready for an aggressive fall since net yen shorts have increased to about 160,000 contracts on the IMM. Though investors opened a number of selling positions, ESM direct recapitalization and potential increasing centralization of financial sector led to a boost to 1.2693 from 1.245's and closed at 1.2663.
These are mere words and comfort the markets in the near term. If action is taken the time frame is painfully long, so even if the euro establishes above 1.2750, it is unlikely to break above 1.2825 near term. Once investors realize that all these decision are still far from implementation, preassuer will continue to build on the downside. The possibility of cutting interest rates from 1% by the ECB also constrains a solid push north.
Expected Range: 1.2400-1.2830 Sell the euro on rallies