The euro showed mixed trading in early deals on Monday ahead of euro-zone's eco-finance ministers meeting in brussels later today. While the common currency held steady against the Swiss franc, it drifted higher against the rest of majors.
Eurozone finance ministers will meet in Brussels today to discuss a bailout package for Cyprus, although a final decision is likely to be postponed until after the presidential elections.
The meeting, scheduled to begin at 11 am ET, will be the last for Luxembourg Prime Minister Jean-Claude Juncker as Eurogroup chair. Juncker has held the post for the past eight years. The January meeting of the ministers selected Dutch Finance Minister Jeroen Dijsselbloem as his successor.
Cyprus asked for bailout in June last year. The bailout has also been delayed due to the size of the required bailout amount, which roughly equates the country's annual economic output.
The common currency re-tested Friday's 2-week low against the dollar in the Asian session as political uncertainty in Italy and Spain revived investor concerns about Europe's handling of its sovereign debt crisis.
Trading volumes remained relatively thin due to public holidays in major markets across the Asia-Pacific region. Markets in China, Hong Kong, South Korea, Malaysia, Taiwan and the Philippines are closed for the Lunar New Year holidays, while the Japanese market remains shut for the National Foundation Day.
Traders also focus towards the upcoming meeting of G20 finance ministers and central bank governors later this week, where the predominant talks are expected to be on the so-called currency wars.
The euro snapped back above the 1.34 level against the US dollar, after having re-tested Friday's 2-week low of 1.3355 in the Asian session. Although the euro-greenback pair is staying well-below its 50.0 percent retracement level, the recent recovery is expected to gain momentum above 1.35 from last week's correction.
The common currency climbed to session's highs of 0.8531 against the pound and 125.01 against the yen around 5:00 am ET. Above the 0.8540 level, the euro-pound pair is expected to resume last month's rally, with 0.87 seen as the next likely resistance level. The euro-yen pair is expected to become a favorite pair for bulls above 125.60, with 127.20/70 seen as the next likely resistance zone.
The euro-Swiss franc pair traded in a 30-pip ranges in late Asian and the early European sessions on Monday, with highs being seen at 1.2290 and a low is visible at 1.2263. Overall technical bias is bearish towards the 1.21 level for the EUR/CHF cross, the level at which the pair began to attract buyers heavily in early January.
by RTT Staff Writer
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