The weekend opened with decisive gaps in trading of EURUSD, AUDUSD, and USDJPY. The weekend drop in Yen was an obvious response to the overwhelming win for the pro-stimulus LDP party in the Japanese elections. The gaps in the other two pairs are tougher to explain, especially because each risk correlated currency moved in opposite direction against the safe haven US Dollar. Since the open of the session, USDJPY and EURUSD each erased most of the gap.
There has not been much significant news in the European session thus far. There were some rumors of Italian press reporting that PM Montin won’t run in the next elections. Monti announced that he will resign following the approval of the 2013 budget, and there are worries that his successor could undue some of the economic measures passed by Monti. The Euro showed no significant reaction to the report.
Also in Italy, the trade balance was reported at 2.452 billion Euros in October, higher than September’s revised 409 million trade balance. The trade balance for the entire Euro-zone was reported at 10.2 billion Euros for October, disappointing expectations for 11.0 billion Euros. That was it for significant releases during the session.
The Euro did not move significantly in today’s session, following an initial fall to 1.3140 against the US Dollar shortly after the open. Since then, EURUSD has remained within a 25 point range in forex trading.
Sterling has steadily gained some ground against the US Dollar in today’s session, setting a new 2-month high, although there don’t seem to be any new fundamental factors influencing the move. Resistance could be provided by the key 1.6200 figure, and support could be provided by the previous 2-month high at 1.6174.
Later in the session, ECB President Mario Draghi will be speaking at 14:30 at the quarterly hearing of the Committee on Economic and Monetary Affairs of the European Parliament. In the DailyFX economic calendar, the speech is rated as a medium risk.
GBPUSD Daily: December 17, 2012
--- Written by Benjamin Spier, DailyFX Research
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