Euro/Dollar Outlook For Week Of June 11-15

Euro/dollar traded in a limited range as the markets received mixed news and still await a formal Spanish aid request. Spain will hold a closely watched bond auction that will serve as a barometer for the crisis. In addition, PMI figures will also get attention. Here is an outlook for the upcoming events and an updated technical analysis for EUR/USD.

The euro/dollar fell to critical support, but made a huge comeback. While Draghi disappointed the markets with no immediate action, he opened the door to full QE and is now waiting for Spain to walk through. Spain took a big step. Is this a significant positive change in the debt crisis? Many problems still remain. The upcoming events feature Italian GDP and important German figures.

THERE is a lot of new euro area economic data to consider today, the most important of which is a first estimate of the euro zone's second quarter output. According to eurostat, output in the single-currency area fell 0.2% from the first quarter to the second and was down 0.4% from a year earlier. GDP dropped sharply in Italy, Portugal, and Spain, as well as in Belgium. The French economy posted zero growth for a third consecutive quarter.

By Labutes IR:In view of the ongoing European sovereign crisis, the single currency (euro) has shown a great resilience against the USD. Over the last few months, the EUR/USD cross has been trading on a narrow trading range between 1.30-1.35, during a period in which Greece has defaulted and the ECB massively expanded its balance sheet through its LTRO operations.

A key question on trader's minds is who will win the June 17th Greece election and whether it results in a Greek exit of the eurozone. Deutsche Bank gives it assessment in a report called Probability weighting EUR views on Greece

By Peter Boone and Simon Johnson In every economic crisis there comes a moment of clarity.  In Europe soon, millions of people will wake up to realize that the euro-as-we-know-it is gone.  Economic chaos awaits them.

EUR/USD: Rates in Focus as ECB’s Trichet Talks Down Outlook