The lighter than expected Basel 3 banking deal conditions for capping the exposure of the EU banks to the markets risks holding just 7% of the common equity money instead of 9.5% which should be reached by 2019 and the EU Commission revising up of the European growth rate this year to 1.7% thanks to the weak euro and the germane driving growth pace which has been revised to 3.4% from 1.2% could underpin the single currency in the beginning of this week with better than expected industrial productions data from china could underpin the risk appetite weighing on the greenback across the broad supporting the equities markets, the commodities and the energy prices as the market has reacted positively as these measures were not as hard as what was expected pushing the banks stocks up but generally, these new regulations have been read as a try for cooling down the banks profits tightening its rules in the benefits of the borrowers for supporting the economy and keeping its rules on just lending conservatively with minimal possibility of taking risks directly and ...

in the same time, capping of the available liquid amounts for lending to not be exposed again to a credit crisis as surely the cost of failing of a borrower is not the same as failing of a bank!. The single currency could break above 1.276 eyeing on getting back 1.30 psychological level after last week worries about the recent European Stress tests results which could contain the market sentiment driving the European yielding curve up bring the doubts about the debt crisis end in the spot which hurt the single currency exchange rate across the broad this week after wall street Journal report highlighted the exposure position of the European major banks to the governmental debts. By god's will, The next major resistances are at 1.293 then 1.30, 1.333, 1.3352, 1.3415, 1.3704 and 1.3885 which is 61.8% Fibonacci retracement level of this same recent declining from 1.5142 to 1.1874 while the supporting levels are at 1.264 then 1.2586, 1.255, 1.2452, 1.2165, 1.2044, 1.1954 and 1.1875 from 1.1875 which has been reached amid the increased worries about the debt crisis and could cap the pair from falling to 1.16 whereas the pair has started its rally to 1.604 before falling again to 1.233 amid the credit crisis and rising back forming a lower high at 1.515 in the beginning of last December.

Best wishes

FX Consultant

Walid Salah El Din

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