The single currency is moving versus the greenback between the effect of the bad economic and political news from Europe and the increased market expectations of having hints of further funds to be pumped from the Fed next year when it finish its meeting next Wednesday by god’s will while the governmental financial effort are looking setting back to the market on  the fiscal cliff which is looking until now unavoidable with the time running with no clear clues of a reached deal between the Republican Party and the Democratic Party for even lowering its massive negative impact which can cost the American families from $2k to $5k a year cutting the GDP growth by 1% approximately by God’s will with no concession until now because Obama seems insisting on the tax hikes and the republicans are still pushing for cutting further health care spending showing that there can be no change of last year last summer agreement to start the austerities measures from the beginning of next year by cutting the govern mental spending by $109 bln and ending Bush’s tax cuts after it has been extended before for another 2 years and imposing new taxes to the higher than 250k$ income a year families ending emergency unemployment benefits to cut the deficit by about $550 bln next year in a plan for saving 7 trillion dollars in 10 years.

The single currency has opened the week below 1.29 but quickly it has managed to turn back above it getting rid of the negative impact of The Italian PM Mario monti about the possibility of his resignation in the case of watching further efforts from Berlusconi to turn back and it is now trading right at 1.293 whereas it has closed last week after upbeat jobs data came out from US showing that there have been 146 new added jobs in November out from the farm sector while the market was waiting for 93k from 138k in October.

The single currency came under continued pressure since the recent ECB meeting last Thursday when Draghi tell that there was voting this time for interest rate cutting but the majority was in favor of having no change currently despite lowering the ECB expectation of both of the growth outlook and the inflation outlook in the euro zone.

The ECB has expected in its recent assessment that it sees the inflation in 2012 ending at 2.5% to be down in 2013 from 1.1 to 2.1% giving wider range for 2014 from 0.6% to 2.2% and it has lowered its EU GDP expectation of 2012 to be from -0.4% to -0.6% and for 2013 to be from -0.3% to -0.9% expecting turning back to the positive territory in 2014 to be from 0.2% to 2.2%.

The markets have started to price in a sooner than later interest rate cut to come next year for spurring investment may lead to drive the deposit rate below zero despite the current assured accommodative stance of the ECB right now as draghi has described during his press conference too following last week decision of keeping the interest rate unchanged at 0.75% by the ECB.

By God's will, EURUSD can face now in the case of rising further another resisting level at 1.2972 before the psychological level at 1.30 which can be followed b 1.3090 by 1.3125 whereas it has managed to turn n back down after failing to get over its previous high on 17th of last October at 1.3138 after its failing also to break 1.3171 whereas it has managed to end its rally from 1.2041 while retreating back can be met by supporting levels at 1.2876 which could prop up the par by the end of last week and getting below it can be met by another supporting level at, 1.2734 before 1.2661 again whereas it could rebound after the market worries about Greece got down while breaking it too can lead to another supporting level at 1.2604 which is forming 50% Fibonacci retracement of the rising from 1.2041 to 1.3170 before 1.2464 again which meets also the 61.8% Fibonacci retracement of this same rising.

Kind Regards

FX Market Strategist

Walid Salah El Din

Mob: +20 12 2465 9143

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