Despite initial enthusiasm over the EU aid package for Spain agreed over the weekend, forex market participants do not want to take huge risks ahead of weekend Greek elections that could result in Greece exiting the eurozone.

Rising scepticism over a €100 billion eurozone bailout for Spain’s troubled banks pushed Spanish government bond yields to 6.86%, the highest level since the common currency was launched. This bailout news does not imply a serious willingness on the part of Europe to tackle its financial crisis but instead implies an act of desperation to delay the inevitable which is the failure of Spanish banks. If the market chooses to see things are worse than expected about Spain, it may cause a sell-off.

There is nothing substantial in the recovery in sentiment, and it appears only to be supported by hopes Europeans will take more measures to ensure the Spanish aid will work while seeking to buy time for Greece. There might also be some hopes the G20 will put pressure on Europe. Given so much uncertainty, players hesitate to build new positions. Investors also watch Fed’s steps carefully. The Federal Open Market Committee is meeting next week as slowing job growth and a deepening crisis in Europe weigh on the outlook.

The Asian stock markets opened higher today. NIKKEI started the day at 8,557.57, previous close was 8,536.72. HANG SENG opened at 18,948.45, previous close was 18,872.56. senior technical analyst at Mizuho Securities, Yutaka Miura said “U.S. stocks likely rose on hopes for more Fed easing next week, but we’re not going to see sustained gains from that. Until the Greek election at the weekend, no one wants to budge”.

EUR/USD is trading at 1.2487 by the time of typing and for today resistances are located at 1.2532 and 1.2574. Support levels are 1.2446 and 1.2359.

GBP/USD is at 1.5549. Resistance levels are located at 1.5611 and 1.5669. Supports are located at 1.5527 and 1.5470.

USD/CHF is trading at 0.9612 by the time of typing and for today resistances are located at 0.9647 and 0.9681. Support levels are 0.9582 and 0.9550.

AUD/USD is trading at 0.9842. Resistances are located at 0.9987 and 1.0025. Support levels are 0.9894 and 0.9838.

The economic calendar is heavy today. EU Industrial Production data will be released at 10:00 GMT. US PPI and Core Retail Sales figures will be released at 13:30 GMT. US Business Inventories data will be released at 15:00 GMT. RNBZ Press conference and Rate Statement is due at 22:00 GMT.