EUR/USD flat in light holiday trade

EUR/USD flat in light holiday trade

The euro was steady against the U.S. dollar in holiday-thinned trade on Wednesday, with trading expected to remain subdued as holidays in many countries limit activity.

EUR/USD hit 1.3195 during late Asian trade, the session high; the pair subsequently consolidated at 1.3194, easing up 0.01%.

The pair was likely to find support at 1.3144, the low of December 17 and resistance at 1.3238, the high of December 21.

Market players remained focused on developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

Without a deal, the U.S. could fall back into recession and drag much of the world down with it.

Elsewhere, the euro rallied to a 16-month high against the broadly weaker yen with EUR/JPY up 0.54%, to hit 112.58, the highest level since August 2011.

Markets in Europe will remain closed for the Boxing Day holiday.

Meanwhile, the U.S. is to publish industry data on house price inflation as well as a report on manufacturing activity in Richmond later in the trading day.

Volumes are expected to remain light because many investors have closed books to lock in profit before the end of the year, reducing liquidity in the market and increasing the volatility.