The Euro is heading south. The currency has previously rally. An expected pull back is just about to happen. It shouldn’t go too low, support levels should form around 1.2687. It is, at the moment, in a small downtrend. The chances of been just a pull back to go higher later are very possible.
At the moment there are some news influencing the current pullback. Spain has declared that is in not rush to seek bailout and is prepared for a new round of austerity. Dilating a solution wouldn’t help the Euro, as the Spanish government could fail with its austerity measures in the short term. It is something to take into account when trading the Euro. Any news from Spain will put pressure on the currency.
Greece has also influency the Eur/Usd pair, as it said that it would need around 15bn euros if it were given a two-year extension to its bailout.
The only favorable news for the Euro has been Barclays forecasts for the euro versus the dollar. Barclays expects the euro to reach $1.35 by the end of 2012.