Closed in NY at $1.2980

<p>  EUR/USD Range: 1.2965 – 1.3017 Support: 1.2906 Resistance: 1.3030 Closed in NY at $1.2980 and came under early downside pressure prompted by the early sell off in […]</p>




Range: 1.2965 – 1.3017
Support: 1.2906
Resistance: 1.3030
Closed in NY at $1.2980 and came under early downside pressure prompted by the early sell off in Aussie-dollar, in turn reacting to negative GDP comments from an RBA official. Euro-dollar traded to a low of $1.2965 before meeting euro-yen linked Japanese demand as this pair saw decent demand into the Tokyo fix. Euro-dollar recovery pushed above the NY high at $1.2994, momentum taking rate through $1.3005 to trigger stops. This added buying, a UK clearer a noted buyer, took rate on to $1.3017 before meeting stronger supply from US and Swiss names. Rate sank back to $1.2980 with traders noting sales from a major Asian sovereign, one trader reporting two tranches of sales. Recovery struggled to gain a fresh foothold above $1.3000, settling between $1.2980/00 into early Europe.


Portugal Auction Preview

The auction comes at tricky time for Portugal as the 10-year yield hovers below the 7.00% yield level that is considered by traders as a threshold level which both Greece & Ireland breached before requesting aid from EU/IMF. The recent support by China pledging to buy Portuguese bonds and recent private placement deal for E1.0bln conducted last week is seen underpinning demand, along with the small auction size. The 10-year OT currently trades at 6.89% mid-yield or 403bps vs Bunds, which is 8.4bps above level when the issue was last sold on Nov 10 for E686mln and was then covered 2.1 times. The 2014 OT trades at 5.606% and was last sold on Oct 27 at an average yield 4.041% and then covered 2.8 times. Auction results due at 10:45GMT.




Range: 0.9810 – 0.9898
Support: 0.9780
Resistance: 0.9984
The Aussie started the Asian session on a weak note as RBA board member McKibbin put a number on the impact of the Queensland floods, suggesting that the floods could knock as much as 1% off GDP growth and sent the AUD down to one month lows at 0.9806. The slide stalled after Australian home loans rose a better than expected 2.5% in November and was also assisted by the rally in Euro through 1.3000 to target stops lurking above 1.3020. The market seems set to test these today.


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