After a quick stop at 1.3380/90 little after German trade data, the EUR/USD bounced back and is now edging higher on the day as the market extends gains above 1.3400. It is believed the European Council meeting taking place today and tomorrow will have the 2014-2020 EU budget approved.

The initial deal anticipates reducing the November budget proposal by 12 billion euros to 960 billion which will be allocated to agriculture subsidies, aid and scientific research over a seven year plan (2014-2020). All members must agree on a deal so it gets approved.

“Upside is seen protected at 1.3458/1.3500 barriers, the latter also presents bearish 20/55 day EMA’s crossover and only break here would ease bear pressure”, wrote Windsor Brokers analyst Slobodan Drvenica, pointing to a current negative structure with extension towards next supports at 1.3300, Fib 38.2% of 1.2660/1.3710 and 1.3265 higher platform, seen as likely near-term scenario. “Key support and breakpoint lies at 1.3170, peaks of Sep 2012”, he added.