FOREX-Euro holds near 2-mth high, more upside seen

* Euro near 2-month highs, little changed at $1.2709 (EUR=: )

* U.S. earnings underpin stocks

* Eyes on FOMC minutes, U.S. retail sales

(Adds quotes, updates prices)

By Tamawa Desai

LONDON, July 14 (BestGrowthStock) – The euro held near a two-month
high against the dollar on Wednesday, supported by strong U.S.
corporate earnings and easing concerns about euro zone sovereign
debt, which also helped push equities higher.

Traders said funds were increasingly moving out of cash and
low-yielding U.S. Treasuries to buy euro and growth-related

Earnings from Intel Corp (INTC.O: ) beat expectations and the
technology gaint gave an upbeat sales outlook, pushing S&P
futures higher (SPv1: )(.SPX: ). [ID:nN12197658]

Investors were also encouraged after a smooth auction of
Greek government paper on Tuesday. [ID:nATH005574].

“Investors are breathing a sigh of relief for now as the Q2
earnings season has begun well and euro zone peripheral problems
appear more stable,” said Geoffrey Yu, currency strategist at

By 0923 GMT, the euro (EUR=: ) eased slightly from late U.S.
trade on Tuesday to $1.2709, not far from a two-month peak of
$1.2739 (EUR=EBS: ) hit the previous day.

Movements could be limited by options with a strike price of
$1.2700 set to expire later in the day.

The next target for euro/dollar is the $1.30 area, in a
head-and-shoulders configuration starting from the low below
$1.20 struck last month, said Roberto Mialich, currency
strategist at Unicredit in Milan.

Intermediate resistance could emerge around $1.28, he said,
adding: “We could see a new trading band of $1.25 – $1.30.”

Others said the next target would come in at $1.2780, which
is a 50 percent retracement of the euro’s fall from mid-April to
the June low.

Data showing slower euro zone inflation as expected, and a
slightly lower-than-expected reading in industrial production
[ID:nBRLEIE63T] had little impact on the market.


The euro also hit a three-week high of 113.29 yen (EURJPY=R: )
before paring gains to trade around 112.90 yen.

Good absorption of the Greek debt overrode concerns about
Portugal’s sovereign rating being downgraded by Moody’s on
Tuesday. It had a stable outlook, which some said had helped
limit fears about the country’s debt.

The yen (JPY=: ) remained pressured and fell 0.1 percent
against the dollar at 88.80 yen, with talk of stop-loss bids
above 89.25 yen.

Options with strike prices of 88.50 yen and 89.00 yen were
set to expire, which may cap movements, traders said.

The dollar index (Read more about the global trade. ) (.DXY: ) was down slightly to 83.56, having
broken trendline support. New support is seen around 83.15, the
38.2 percent retracement of the index’s November to June rally.

The Australian dollar hovered near $0.8828 after hitting a
three-week high of $0.8851 (AUD=D4: ).

Other major U.S. corporates to report quarterly earnings
this week include JPMorgan Chase & Co (JPM.N: ) and Bank of
America Corp (BAC.N: ). [ID:nN07172590]

The market will look to the minutes of the U.S. Federal
Reserve’s June 22-23 policy meeting, due at 1800 GMT, on
speculation policymakers may have discussed further easing

U.S. June retail sales, due at 1230 GMT, will also be in
focus with the market expecting sales fell 0.2 percent.
(Editing by Susan Fenton)

FOREX-Euro holds near 2-mth high, more upside seen