Just a day before the summit of European Union leaders, the debates over what will be discussed and who will say what have already begun in the EU Parliament.

EU President Van Rompuy said today that it is urgent for the summit leaders to agree on a European Union budget for 2014-2020. He suggested that his proposal from November 22 could constitute the basis for a deal. European Commission President Barroso also called for the leaders to bridge their differences over the budget. Barroso added that the crisis is far from over, thereby taking somewhat of a more negative tone than other EU leaders.

Following concerns aired by President Hollande yesterday, French Minister Cazeneuve said President Hollande has no plans to raise the Euro issue at the summit. The recent 1500 point rise in Euro against the US Dollar in Forex markets has worried some over possible negative effects on European exports. ECB member Liikanen said the central bank has no foreign exchange target.

Tomorrow, an agreement on an EU budget may help improve Euro trading, but it depends on the specific outcome of the budget talks. Any serious talks of controlling the Euro exchange could weaken the Euro in Forex markets.

In today’s trading, the Euro erased most of yesterday’s gains against the US Dollar. There were no specific stories driving prices, rather the decline might have been due to worries over Euro strength or maybe the political turbulence felt earlier in the week in Spain and Italy. The ECB rate decision for February will be announced tomorrow, which may affect Euro prices. A 14-month high recently set at 1.3710 may provide resistance for EUR/USD, and a broken resistance line at 1.3500 may provide support.

In economic releases, the UK Halifax house prices fell 0.2% in January. UK Business Secretary Cable said the BoE’s Funding for Lending Scheme has helped mortgage lending, but it has not helped small company lending. Sterling climbed to 1.5670 during Cable’s comments.

EURUSD Daily: February 6, 2013

Budget_Talks_Take_Center_Stage_Ahead_of_the_EU_Summit_body_eurusd_daily_chart.png, Budget Talks Take Center Stage Ahead of the EU Summit

Chart created by Benjamin Spier using Marketscope 2.0

--- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to instructor@dailyfx.com .