FXstreet.com (Barcelona) - It's been more than 9 hours since
EUR/USD bounced to current levels around 1.3240 from overnight lows
at 1.32, now awaiting for more US 'fiscal cliff' news to come, as
it remains the primary risk event in financial markets; it's all
around. That, and Yen weakness. It's reminiscent of a time just few
months ago when pronouncing the word 'Greece' shook the EUR/USD.
Now, is the same is true with the 'fiscal cliff'.
Yesterday, during early NY session, EUR/USD traded off fresh weekly
highs, dealing around the 1.3285s. US Senate Majority Leader, Harry
Reid, was recently quoted as saying that going over the fiscal
cliff "looks like where we're headed," and EUR/USD slipped all the
way to 1.32 round in about 15 minutes time, the same as it happened
And so it seems selling pressure will continue on risk aversion, as
long as we wait for the fiscal cliff results and President Obama's
State of the Union Address next year. Meanwhile, everything seems
lined up at critical levels to make or break. Oil is sitting right
below fresh 9-week highs around $91 level; Gold printed a double
low at $1635 past Dec 20/21, and now trades quiet around $1660, its
200 day SMA; Asia-Pacific local share markets keep printing fresh
2012 highs, despite the weak outlook for US equity indexes.
US domestic economic data released Thursday showed the housing
sector keeps improving, though at a slower pace. But consumer
confidence had a bigger hit, dropping to a 4-month low, down to
65.1 from previous 73.7, showing "the scale of the drop really
intensifies the concerns about the potential economic implications
from $600bn+ of tax rises and spending cuts due to hit in less than
a week, unless politicians can strike a deal," noted James
Knightley, an analyst at ING.
For the London morning session ahead, Italy will auction several
long-term sovereign debt maturities, which, coupled with upcoming
general elections and the uncertainty surrounding Italian PM Monti,
could be the focus today in Europe. No other major news is expected
to be released until US Pending Home Sales at 15:00 GMT.
Against the Japanese yen, EUR printed a fresh 16-month high at
114.70 in early Tokyo trade, coming all the way from record 11-year
lows around 94.00 by late July, adding +14.6% gains year to date.
"No sign yet of any slowdown in the EUR/JPY bull move and I suspect
that Japanese investment funds have been buying this morning. The
high so far has been above 114.70 and there are expected to be
barriers in place ahead of 115.00," said FXWW founder Sean Lee.