Forex: EUR/USD hits 1.3200 on EZ banking union news (Barcelona) - Reuters is reporting that ECB Mersch and Constancio will take lead on the banking union project called by the European Commission and leaders of the Eurozone. Added risk sentiment followed, taking the EUR/USD out of the consolidative range and extending gains further to the 1.3200 mark.

Also on the headlines are more news from the “fiscal cliff” negotiations. After Republican Boehner’s resistance to President Obama’s offer to raise tax rates for households earning more than $400,000 (up from $250,000), he proposed $1 trln in revenue in return for $1 trln in spending cuts. During the weekend, it became clear that Republicans are willing to raise taxes on millionaires.

In order to avoid an eventual slip back to the 1.3140 October peak and the 1.3127 early December high, Commerzbank analysts point to the importance of a close above 1.3180. “A close above the 1.3180 would introduce scope towards the 1.3487/1.3522 resistance area (February high, 50% of the 2011-to-2012 decline and the 200 week moving average).