Forex: EUR/USD plunges on US Senate Harry Reid (Barcelona) - The pair hit its high at 1.3284 ahead of the NY session, and little after the opening, the EUR/USD plunged strongly to the lower end of the 1.3200 latter. The trigger for such a market movement came from the US Senate, where the majority leader Harry Reid said the US looks to be heading to go over the cliff.

Scared investors hit the selloff button and the EUR/USD fell to 1.3210 low. The NY session saw released new updates of the US new home sales and consumer confidence. US new home sales came in a little lower than the expected 0.378M by rising from 0.361M (revised from 0.368M) to 0.377M in October, meaning a 4.4% since September. Consumer confidence fell from 75.1 (revised from 73.7) to 65.1, coming much lower than the expected 70.3.

“EUR/USD has broken the strong resistance at 1.3172 (17/09/2012 high) and has, thus far, successfully tested the hourly support at 1.3144 (17/12/2012 low)”, wrote MIG Bank analyst Bijoy Kar, monitoring the test of the recent high at 1.3308 (19/12/2012 high).