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Forex - EUR/USD trades flat to higher in thin, holiday session

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Shutterstock photo - The euro traded flat in thin, holiday trading, with the pair jumping in and out of positive territory.

Markets were closed in the U.S. in observance of the Martin Luther King, Jr. holiday though investors remained hopeful that Congress will steer the country away from a debt-ceiling showdown and avoid roiling markets, which allowed for slight gains.

In U.S. trading on Monday, EUR/USD was trading down 0.01% at 1.3314, up from a session low of 1.3300, and off from a high of 1.3333.

The pair was likely to find support at 1.2999, the low from Jan. 4, and resistance at 1.3398, Friday's high.

On Friday, congressional Republicans said they would hike the government's debt ceiling for three months if Senate Democrats pass a budget proposal, which fueled appetite for risk albeit in quiet trading.

Fears congressional bickering similar to the 2011 debt-ceiling debates swelled in recent sessions, as markets roiled two years ago when lawmakers waited until the last second to lift the government's borrowing limit, nearly throwing the government into default.

Elsewhere, eurozone finance ministers were holding talks in Brussels to discuss a bailout for Cyprus.

On Friday Jean-Claude Juncker, the outgoing chairman of the eurogroup of finance ministers, endorsed Dutch Finance Minister Jeroen Dijsselbloem as his replacement.

The head of the eurogroup plays a vital role when crafting policy responses to the European debt crisis.

Elsewhere, Germany's producer price index fell last month, official data showed on Monday.

In a report, Destatis said that Germany's producer price index contracted by 0.3% in December compared to a contraction of 0.1% in November.

Analysts had expected German producer prices to remain unchanged last month.

The euro, meanwhile, was up against the pound and down against the yen, with EUR/GBP trading up 0.32% at 0.8414, and EUR/JPY trading down 0.32% at 119.55.

On Tuesday, the eurozone group of finance ministers will hold a second day of talks in Brussels.

Elsewhere in the eurozone, the ZEW Institute is to release its index of German economic sentiment, a leading indicator of economic health.

The U.S. will publish private-sector data on existing home sales, a leading indicator of economic health.

Also Tuesday, the World Economic Forum is to begin its annual meeting in Davos, Switzerland. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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