The new 2013 friend remains our friend
The G10 FX space remains in a consolidation pattern with equity markets in positive territory and the world seemingly a happier place. The euro has traded in tight ranges thus far this week as the market flirts with last year’s high of 1.3488 with stop entries and options barriers reported at the 1.3500 level.
It seems the market has brushed off the nervousness surrounding the year-end fiscal cliff circus and with last week’s early repayment of the ECB three-year LTRO giving short term rates a boost, the woes surrounding the European banking system are in the rear view mirror for now. This development gave the FX market the green light to continue the unwinding of long CHF and JPY positions with all euro cross markets now being talked about as ‘the trades of 2013’.
On the week the market is clearly focusing on the Friday finale of the NFP but with the FOMC and US GDP release I’m expecting good trading opportunities into the month-end rebalancing. Today’s data highlights will be from across the pond in the form of the Conference Board’s consumer confidence reading and the November Case-Shiller home price index.
Supports 1.3430-1.3390-1.3340 | Resistance 1.3488-1.3500-1.3620
Supports 90.40-90.25-89.60 | Resistance 91.05-91.30-91.80
Supports 1.5680-1.5600-1.5550 | Resistance 1.5725-1.5780-1.5885
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