It’s quite a festive market today, with a slight bias to risk with second tier data to be released
City Index December 23, 2011 2:00 PM
<p>GBP/USD Range: 1.5669 – 1.5708 Support: 1.5600 Resistance: 1.5800 Sterling continues to hold onto gains, with risk looking positive again in thin holiday markets. Asian […]</p>
Sterling continues to hold onto gains, with risk looking positive again in thin holiday markets. Asian equities put in a solid performance overnight. At 9.30am this morning we see the release of UK mortgage approvals for November.
The euro opened on December 23 2010 at 1.3087. Without any breaking news or headlines from the EU, one can expect the pair to consolidate 1.2950-1.3250 until 2012 is upon us, with near term levels being 1.3200 (rally on the initial LTRO release) and 1.3000 (reversal on rumours of downgrades). The rumour mill is at full pace about an imminent downgrade to the French AAA rating. There no smoke without fire, but surely such an announcement wouldn’t come during the holiday period? Then again the US downgrade was announced on a closed market.
There’s very little to add on this pair as Japan celebrated the Emperor’s birthday, with this pair dominated by solid demand for AUD/JPY overnight although, as the range suggests, it wasn’t exactly exciting. Although we note exporters are lined up to sell any rally, there’s a possibility of the base rising intraday. With market predictions calling a solid move for 2012, we still need to be alert to the US yield curve thus the release of new home sales today at 3pm will be worth keeping an eye on. Note there was an article in the Wall Street Journal suggesting the US Fed may make a statement early next year signalling short term rates are to stay on hold beyond 2014.
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