Euro Continues its Upward Momentum

Euro Continues its Upward Momentum

For the 24 hours to 23:00 GMT, EUR rose 0.36% against the USD and closed at 1.3228.

However, investors remained focused on developments surrounding the fiscal cliff in the US, approximately $600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

In the US, on a seasonally adjusted basis, the S&P/Case-Shiller 20-City composite home price index rose 0.7% in October, compared to a 0.4% increase in September. Market had expected prices to increase by 0.5%. Also, the Richmond Fed Index for manufacturing sector retreated to a reading of 5.0 in December, from a reading of 9.0 in November.

The US Treasury Secretary, Timothy Geithner, has cautioned that the US would reach the $16.4 trillion debt ceiling in less than a week. He added that the treasury would create a $200.0 billion in “headroom” that gives the government less than two months before it defaults on its debt.

In the Asian session, at GMT0400, the pair is trading at 1.3232, with the EUR trading marginally higher from yesterday’s close.

The pair is expected to find support at 1.3184, and a fall through could take it to the next support level of 1.3135. The pair is expected to find its first resistance at 1.3267, and a rise through could take it to the next resistance level of 1.3303.

Trading trends in the pair today are expected to be determined by the release of consumer confidence and producer prices data in France. In the US, investors await the release of initial jobless claims, consumer confidence and new home sales data.