The USD and the euro gained further against the Japanese yen as the last full week of 2012 neared its end in Asia Friday. Dollar-yen traded through last night’s Y86.16 New York high in Asia today and was lifted to Y86.63, its highest since late July 2010. Last night, the pair had stalled ahead of the mid August 2010 peaks at Y86.30-35. Investors should brace for a test of Y87 amid low-liquidity conditions during the New Year’s break. Japanese financial markets are closed between Dec. 29 and Jan. 3. The Y87-mark stood as a key support level back in 2008 and 2009 when the dollar staged a steep fall from over Y110 level. Given the fact that there is no major technical resistance levels following the most recent run-up, we should take the Y87-mark as a major upside target for now. From a technical perspective, there is also not much in the way of resistance until the July 28, 2010 high around Y88.11, which was also an important low from earlier in 2010. Euro-yen traded as high as Y114.69 this morning, its highest since July last year, and was last at Y114.48 compared with a U.S. close of Y113.99 overnight. Euro-dollar was at $1.3244 as the morning ended here, after a $1.3232 to $1.3250 range, and up slightly from $1.3237 overnight. U.S. fiscal cliff worries remain at the top of the investors’ list of concerns as the New Year looms. President Barack Obama and Vice President Joe Biden will meet Friday afternoon with congressional leaders to discuss the fiscal cliff impasse, the White House confirmed Thursday evening. The meeting will follow a day of grim fiscal cliff warnings, fierce recriminations, and aggressive finger pointing by both parties and would seem to raise hopes a deal can be reached by year end. But one lawmaker, Sen. Bob Corker, a Republican from Tennessee, said he expects the White House session “will be more about optics” than serious negotiating.
EasyForexNews Research Team