Markets were supported by news that Spain is closer to asking for an aid. The Financial Times reported that euro officials are in talks with the Spanish government behind the scenes, trying to outline conditions and fiscal reforms for the country, which is needed to acquire a fresh bailout, and that would be enough to trigger the new Outright Monetary Transactions program recently revealed by the ECB. The results for negotiations and the bailout to be unveiled next Thursday as reported by the financial times. The headline was the main catalyst for trading in today’s session amid the lack of major economic releases on the calendar.
The EURUSD pared some of the recent losses. After starting the trading session at 1.2972 which is a key support level in the near term, the pair rebounded to print an intraday high at 1.3049 before retreating slightly. I consider the sell-off lately as a mere correction following the sharp incline, where further upside is still seen. The next potential target and resistance level at 1.3075, followed by the recent highs around 1.3160. To the downside, a break below 1.2935 is the key towards a deeper pullback to the 200-days SMA at 1.2820.