EUR – Euro-dollar opened on a buoyant tone in Asia and lifted on strong cross demand to $1.3235, before profit take sales eased. The rate extended slippage through $1.3200 amid a quiet session to print lows of 1.3188 ahead of Europe. Euro-dollar opened flat in Europe before custodial name supply pressed to $1.3176, dip demand later recovered to $1.3195 and the rate settled in a tight range ahead of NY. Volumes expected light for quarter/year end flow and with traders on the sidelines, focus remains on whether the US can avert the looming cliff when talks resume at 1600GMT. On the downside initial support seen at $1.3166 (28 Dec low), a break opens demand into $1.3160/50 ($1.3156 – 23.6% of $1.2662-1.3308). Tech resistance from the 5-day ma seen capping moves on the topside at $1.3212, through here opens offers at $1.3235/40 ($1.3235 – Asian high), ahead of more techs at $1.3257/75 28 Dec high, Resistance line from 19 Dec.
GBP – Lifted in tandem with euro-dollar to $1.6179 in early Asia, before profit take sales eased to $1.6160. The rate settled in a tight range with volumes seen light as traders remained on the sidelines for year-end flow watching developments from the US to see if they can avert going over the cliff. Euro-sterling largely tracked euro-dollar moves and lifted to stg0.8185 on early cross demand, the rate later pared gains and ground to stg0.8162 ahead of Europe. Cable opened heavy in Europe and slipped to lows of $1.6134 where the rate found support from the 5-day ma and recovered to opening levels. The pair later extended recovery pullback efforts to $1.6178, before resistance from the Asian high checked moves to settle around $1.6165. Euro-sterling initially lifted to stg0.8173, before the bounce in cable on broad sterling demand pared gains. The rate extended the slow grind to stg0.8155 and with strong
JPY – Thin markets continued overnight in Asia with the Tokyo holiday and dollar-yen extended Friday’s losses to Y85.67 in early trade, flushing stops on the move. Dip demand cushioned moves and the rate bounced back above Y86.00 on broad dollar strength, extending to Y86.18, before late profit take sales eased. Euro-yen opened on the defensive and pressed to Y113.20, before the cross tracked euro-dollar’s extended recovery to Y113.80. Like the dollar profit take sales emerged and the rate closed ahead of Europe at Y113.55. The yen pairs remained in consolidation mode in light European morning trade. Dollar was tied to a narrow Y85.98-86.16 range, with decent support on the downside ahead of techs at Y85.72/67 (5-day ma, Asian low). Whilst euro-yen for the most part was stuck between Y113.50-60 as traders squared positions for year-end as focus turns to US fiscal cliff talks at 1600GMT.
EasyForexNews Research Team