Closed in NY Friday at $1.3188 after recovering off a pullback low of $1.3159. Early Asia sold back into this recovery, the rate reacting to weekend reports suggesting Fiscal Cliff negotiations have been diverging which in turn weighed back on risk to the benefit of the dollar. Rate pressed to lows of $1.3168 before picking up demand interest, some suggesting that decent bids remain in place around that NY pullback low at $1.3159. Rate recovered to $1.3186 before settling between $1.3170/85 into Europe. Christmas holidays in Europe Tuesday/Wednesday expected to make for thin trade, a lot of traders taking today out to extend the holiday, with Thursday/Friday this week the next days of full trading. The thin conditions can leave the rate open to order driven trade, as well as any reaction to Fiscal Cliff comments, which could make for volatile trade. Support $1.3160/50, stops $1.3140. Resistance $1.3190/1.3200, $1.3220 ahead of $1.3230/35.
EasyForexNews Research Team