FXstreet.com (Córdoba) - Another day, the same range for the euro. Even though the shared currency surged to a high of 1.3022 during the European, it quickly turned lower as investors struggled to find reasons to buy the euro. Nothing has changed in Europe, and uncertainty over whether and when Spain would request a bailout, continues to weigh on sentiment.
US stocks opened positively, while European markets were mostly higher, after better-than-expected UK GDP, a string of corporate earnings reports and mostly positive US data. However, the risk-on rally was also having a hard time finding follow-through buying.
Looking ahead, there is no much in the economic calendar until the Asian session, so in the absence of shocking news, EUR/USD should continue to waver within this week's range. The pair was last at the 1.2950 area, down 0.2% on the day.
Euro weakens but remains rangebound. Catalyst wanted
The short-term outlook has turned negative for EUR/USD after failing to consolidate above the 1.3000 level, with 1.2920 as immediate support. However, the bigger picture hasn't changed at all and the pair remains in a rangebound phase between 1.2800 and 1.3170 waiting for a trigger strong enough to propel a decent move either side of the board.
Of course Spain is the most suitable candidate for this task as it remains in center stage. However, Greece or even Italy could help, recalling that the US has its own problems. On Wednesday the FOMC offered nothing new on the monetary policy front, as expected ahead of the presidential elections, and was a non-event for the dollar, but QE3 and the fiscal cliff are probably preventing the USD to rally.
"Although there were no indications in the statement that the Fed is moving closer to an Evans rule, we nevertheless think that this will be the next step from the FOMC", says the Danske Bank team. "We continue to hold the view that the ECB will not be able to keep-up with the Fed and continue to see relative rates pushing EUR/USD higher".
Meanwhile, Senior Currency Strategist at Rabobank, Jane Foley, believes that Spain would be the main driver behind the price action of the EUR/USD in the near term, and she assesses "while the degree of any market tension over the weeks ahead will likely be calmed by the knowledge that the ECB's OMT awaits, we see risks of pullbacks in EUR/USD potentially to the 200 day sma at EUR/USD1.2836".
