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The EUR/USD pair fell during the Wednesday session, but got a bounce later in the day at the 1.2850 level in order to form a hammer. In fact, this pair suddenly looks bullish as we anticipate the Spanish budget coming out later today.
Even though we've seen trouble in the streets of a couple European countries, it looks like more than likely the Spanish will be forced to ask for a bailout soon. In a roundabout way, this is actually positive for the Euro. Because of this, we think a break of the highs for the Wednesday session should be a buy signal, but it must be said that above here we see quite a bit of noise until we get above the 1.33 level. Because of this, we will more than likely play the Euro against other currencies such as the Yen.