Dukascopy Afternoon Forex Overview

The Euro Zone will experience refinancing problems in February, reported Ewald Nowotny, Governing Council member of the ECB. Refinancing eliminating deficit financing will reach about EUR1.3 trillion next year coupled with EUR1 trillion for refinancing of banking industry. It is crucial to work out short-and long-term measures to solve financial difficulties and further fine-tuning in the policies is necessary, he stressed.

In November US consumer price level was flat, mainly due to dropping energy costs, said the Labor Department on Friday. Core prices excluding energy and food costs added 0.2%. The real readings mostly match with analysts’ expectations. Inflation adjusted hourly salary declined 0.1%. Unadjusted Consumer prices rose 3.4% on yearly basis.

EU leaders may abandon UK derivative legislation after PM Cameron’s attempt to protect country’s financial sector almost ruined EU summit, said 4 officials familiar with matter. Analysts suggest that possible crumbling of UK’s derivatives could be a notice from EU officials that British veto alone cannot strengthen its financial system.

Switzerland’s economic expansion is likely to halt in 2012 as franc is appreciating and diminishing global demand harms exports, said KOF Economic Institute. Researchers expect economy to grow 0.2% in 2012 and 1.9% in 2013. Yesterday Swiss National Bank maintained the boundary at 1.20 francs per one euro to avoid deflation and support exporters.

Citigroup Inc. was forced to cease its financial product retail sales in Japan for 30 days for not providing adequate disclosure about risks in one of the retail units. The suspension will come in force since January 10, according to FSA. Citigroup Inc. also needs to submit plan of business enhancement till January.

 

Daily maximum: 1.3084
Daily minimum: 1.3004
The daily forecast mean at 1.3009 has been touched, though the pair recovered its intraday losses after Mario Draghi, the ECB chairman, stated the euro zone is on the right track.
Daily Resistance: 1.3057; 1.3099; 1.31500.
Daily Support: 1.2963; 1.2913; 1.2871.
Daily Bias: Strongly bearish.

Daily maximum: 101.79
Daily minimum: 101.35
The single European currency is trading within 101.-102 price range on further uncertainty with EZ, though level 101.32 – the daily forecast consensus – was not tested today after the Euro pared intraday losses on the ECB chief statement.
Daily Resistance: 101.60; 101.89; 102.17.
Daily Support: 101.03; 100.75; 100.46.
Daily Bias: Bearish.

Daily maximum: 1.5557
Daily minimum: 1.5494
The British pound continued trading in a flat trend today on uncertainty over the UK economy and the prospects of the Eurozone, causing the market mean at 1.5496 to breach.
Daily Resistance: 1.5548; 1.5587; 1.5644.
Daily Support: 1.5452; 1.5395; 1.5356.
Daily Bias: Strongly bearish.

Daily maximum: 77.96
Daily minimum: 77.77
The American dollar inched today as investors were selling yens against USD after the US economy posted 0.2 Core CPI versus expected 0.1%. As a result, the daily target at 77.80 has been crossed.
Daily Resistance: 78.08; 78.32; 78.49.
Daily Support: 77.67; 77.50; 77.26.
Daily Bias: Neutral.

Daily maximum: 0.9414
Daily minimum: 0.9352
USD/CHF is showing a bullish bias after the US economy posted 0.2% Core CPI, indicating the US economy is gaining strength, though the daily target at 0.9432 has not been reached yet.
Daily Resistance: 0.9502; 0.9604; 0.9661.
Daily Support: 0.9343; 0.9286; 0.9184.
Daily Bias: Bullish.

 

Ties That Bound Europe Now Fraying
A common currency drove investors to Europe’s outer reaches, then scared them away.

Consumer Prices in U.S. Stagnate as Gasoline Costs Decrease
The cost of living in the U.S. stagnated in November as gasoline prices dropped, supporting the Federal Reserve’s view that inflation remains in check.

Yuan Jumps on Signs of Central Bank Intervention
The Yuan jumped to a record high on Friday against the dollar on suspected intervention orchestrated by the central bank, its most explicit action in three months to deter speculators from betting on a fall in the currency.