Fiscal cliff agreement priced in

<p>The market appears to have priced in a positive outcome to the fiscal cliff issue, with many investors of the thought that it’s essentially already […]</p>

The market appears to have priced in a positive outcome to the fiscal cliff issue, with many investors of the thought that it’s essentially already been agreed and that politicians are just maintaining the circus atmosphere for political reasons.

In Asia we have seen the euro make a seven-month high against the US dollar and JPY as we trade a new high for 2012. Going into the BoJ meeting, it is unlikely that Abe will be able to get his inflation target of 2% announced at this meeting, with the January 21 meeting looking more likely to see any development. If the market is wrong on a satisfactory outcome to the fiscal cliff then the start of 2013 is could be very ugly for risk.

Today’s data consists of German IFO readings at 9am, along with the UK’s MPC minutes and CBI sales survey this morning. The US data session brings second tier housing data.

 


EUR/USD

Supports 1.3220-1.3190-1.3150 | Resistance 1.3285-1.3390-1.3485


USD/JPY

Supports 84.10-83.60-83.30 | Resistance 84.50-84.90-85.30


GBP/USD

Supports 1.6230-1.6215-1.6170 | Resistance 1.6275-1.6315-1.6375

 

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