Rabobank - "Despite a push back into long USD positions last week, on a one day view the greenback is the weakest performing G10 currency.  Hope that US politicians can avoid the fiscal cliff has been gaining traction over the weekend after US lawmakers expressed confidence that they can reach a deal.  Clearly if an agreement is reached the US should be able to avoid be plunged back into recession early next year, if it can’t the Congressional Budget Committee has estimated that the economy could dive by 2.9% in the first half of 2013. (...) Next prime focus for the Eurozone markets will be tomorrow’s Eurogroup meeting.  It is hoped that the officials will be in a position to sign off on the next tranche of Greece’s bail-out money.  This may be worthy of another small boost to risk appetite this week.  However, it is clear that the factions of the troika have differing opinions on the sustainability of Greek debt over the longer-term and this will surely be an issue that will return to the fore again and again over the coming years. In summary while there is some scope for additional upside in EUR/USD this week we expect that this will limited.  We would favour selling rallies towards the 200 day sma at EUR/GBP1.2808."

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Tags: EUR/USD, EURUSD, Jane Foley, Rabobank, US Dollar, USD

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