EUR/USD rallies on data and auction


Spain sold a total of €5.44 bn of Letras at 1.899% (vs previous 2.049%) of 12-month and 2.308% (vs previous 2.399%). Almost full take up and improved yields give confidence to investors after yesterday’s Moody’s downgrade to Spain from A1 to A3.

The rally is also due to EMU data, which ZEW survey revealed better figures than expected, turning almost positive. In Germany, the economic sentiment did turn to positive, -15.0 to 5.4. However, Industrial Production (YoY9 in the EMU has seen a decrease to -2.0% in December, from 0.1% in November, and an expected decline by -1.0%.

The improved sentiment is taking over the EUR/USD, and after retracing daily losses at 1.3172, the cross continued its upside and has reached 1.3200. At the moment of writing, the pair is facing resistance at the psychological level.

“To revert the current bearish sentiment, it looks like it would take a move back above 1.3240 for the euro to turn to the upside. Note, on the way lower, Euro may run into some buyers at 20-day MA”, wrote Ivan Delgado Egea, independent analyst at


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