European markets are back open today and there have been a few economic releases this morning out of Europe, but general chatter is still pretty quiet as was expected for the Christmas to New Years week. However, despite the lack of chatter, equities are trading higher in European markets and the Euro and Sterling are both up against the US Dollar in currency markets.
The Euro is up for the second day and is 100 points higher than the post-Christmas open. EURUSD is currently trading slightly below 1.3300, and an 8-month high was set last week at 1.3308; that high could continue to provide resistance. Support could be provided by a broken support level at 1.3158.
In economic releases, BBA reported that 33,634 new mortgages were obtained in the UK in November. The number was less than expected, but didn’t have a significant effect on Pound trading. Also reported today, the France consumer confidence indicator beat expectations by 2 at 86; the Italian business confidence indicator beat expectations by 0.1 at 88.9.
The biggest factor that could affect FX trading in the remaining days before New Years is the impending US fiscal cliff. Currency Strategist Ilya Spivak discusses potential cliff impact on the markets here. Also, the Yen has been severely sold off following the recent elections of a new prime minister and could see further volatility in either direction.
USDJPY Daily: December 27, 2012
--- Written by Benjamin Spier, DailyFX Research