EUR/USD Climbs Above 1.32, Waiting For 'Fiscal Cliff' News Below 1.3250

Includes: ERO
by: FXstreet (Barcelona) - EUR/USD edged higher in early Wednesday's NY trade from Monday's close, printing fresh weekly highs near 1.3255 in thin market conditions on the back of broad USD weakness, save yen. The USD index printed a daily low at 79.42, and last trades at 79.58, sitting relatively flat for the week. U.S. 10 year bond yields are also nearly flat for the week, around 1.77%, capped below the 1.8% level.

U.S. SP500 index remains under selling pressure following last Thursday's crash to 1390 lows, currently near session lows above 1415 figure, while Asia-Pacific local share markets are mostly showing green lights, with Nikkei and Hang-Seng index at fresh 2012 highs. Copper and Oil are both higher, while Gold is so far flat for the week.

Market focus shifts again to U.S. 'fiscal cliff' talks as U.S. Congress and Senate will resume discussions on the matter later today, as President Obama and Congressional leaders return from Christmas vacation; many analysts believe it very unlikely to reach a deal before year-end. Before any news from 'fiscal cliff' comes, U.S. will deliver unemployment claims data at 01:30 GMT, followed by New Home Sales and CB Consumer Confidence at 15:00 GMT.

"The EZ debt market has calmed considerably and asset managers are now looking at the very attractive yields available, rather than worrying about default, and this is also driving funds into the EUR," says FXWW founder Sean Lee, with Euro and Swiss Franc being strongest currencies among majors for last 2 days, while Yen has been the weakest.

From a technical view, "Resistance at 1.3300 continues to suppress any bullish momentum as the EUR/USD pair consolidates," says Independent Analyst Richard Lee, adding: "Failure to rise above the figure would prompt a decline to initial support at 1.3165," the analyst concludes.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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