Forexpros – The euro traded up against the dollar on Tuesday, regaining composure after plummeting on Greece’s political turmoil and talk the country may be headed out of the eurozone.
In Asian trading on Tuesday, EUR/USD was trading up 0.08% at 1.2832, up from a session low of 1.2816, and off from a high of 1.2834.
The pair was likely to test support at 1.2133, the low of Jan. 17, and resistance at 1.2905, the high of May 14.
Greek political parties remain stuck in a stalemate, unable to agree on a coalition government, and no breakthrough soon will lead to a fresh round of elections in June.
Many across the continent see a new round of elections as sign Greece is politically unable to meet its commitments to fiscal austerity and will likely exit the euro, stoking fears of a domino effect involving other economies fighting to streamlined their bloated economies.
Meanwhile in Spain, nervous investors demanded Madrid to pay up in government auctions, with the yield on Spanish 10-year bonds soaring to 6.27%, the highest level since December of last year.
The embattled currency took another blow to the chin on news eurozone industrial output dropped 0.3% in March, much worse than expectations for a 0.4% increase.
The currency, however, rose in early Asian trading amid bottom fishing.
Despite the turmoil in Europe, capital flight has not been as much as a threat as in emerging market economies, whose currencies often take much worse of a beating during debt crises.
The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP up 0.06% at 0.7973 and EUR/JPY trading up 0.11% at 102.50.
Later Tuesday, preliminary gross domestic product growth figures are due out for the eurozone as a whole as well as for France, Germany and Italy.
Meanwhile, the ZEW Centre for Economic Research will release a report on German economic sentiment as well as on economic sentiment throughout the eurozone.
European Union finance ministers are also scheduled to conduct meetings to discuss ways out of the crisis.
In the U.S., retail sales and inflation figures are due out.
Reports on manufacturing activity in New York, as well as U.S. net long-term securities transactions and business inventories are also due out.
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