Daily Forex Overview

Previous session overview

On December 25th only Japan was opened for business. Currency markets remained very calm, despite a row of Japanese data releases and the announcement of a huge stimulus package the previous day that all confirm that the economy is not in good shape: Japanese Retail sales fell 0.9% and the jobless rate climbed 0.2% to 3.9%, meanwhile USDJPY kept close to 90.50.

The Euro opened at 1.4020 in Asia this morning, dipping to a low of 1.3990 before rising a full 100 pips to 1.4090, making a new high for the week just a few minutes ago. Cable also rose but lagged its European counterpart with a range of just 1.4723 - 1.4791. This allowed EURGBP to rise again, a retest of the 0.9560 high seen last week is possible. USDCHF maintained its bearish trend with a high of 1.0791 and a low of 1.0740.

Market expectation

It is Friday and many traders will stay away, extending their holiday break into the weekend. There is no economic data due in Europe or North America and we look ahead to a typical non-event where currencies should hold their ranges.

EURUSD may be the most interesting pair to watch today, there is space to rise to 1.4128 and a break there keeps the pair well bid for further gains toward 1.46 next week. Strong support is the bullish trend at 1.4040, a break there risks to try the 1.4000 support. GBPUSD has unchanged strong resistance at 1.4800, next is 1.4880. A weekly close above that may be needed to stop the Pounds prolonged weakness. To the downside 1.4715 is minor support, 1.4660 is strong.

USDJPY is expected to hold an initial range of 90.20 to 90.65. While there seems to be no economic reason to see the pair fall, the technical picture favors the downside for 89.90 or even lower. A rise can extend the weeks range above 91.00, medium-term resistance is up higher at 92.50. USDCHF bearish trend-line is close-by at 1.0780, next resistance is seen at 1.0810. To the downside there is room for 1.0720, stronger support underneath at 1.0665.