The currency markets were extremely quiet during today’s session as there was little chatter and no significant economic releases. Liquidity is expected to remain low for the last day of the Christmas to New Years break.
The one story that remains influential over the financial markets into the year end is the impending fiscal cliff. The US Senate met yesterday to discuss the measures, but has yet to come to any further agreements. While optimism remains present for an 11th hour deal, there is still a possibility for Congress to repeal some of the tax hikes or spending cuts into the new year, even after having symbolically fallen off the cliff.
The only significant release during the European session was news that Greek retail sales fell 17.1% in October from a year earlier. The German, Italian, and Japanese stock markets are all closed today. In the US session, the Dallas Federal Manufacturing Activity for December will be released at 15:30 GMT.
The Euro has declined against the US Dollar in forex markets since today’s open. EURUSD is currently trading slightly below 1.3200 and could see support by a broken resistance level at 1.3158. Resistance could be provided by an 8-month high recently set at 1.3308.
Forex markets will close later today at 17:00 GMT for New Years, the markets will reopen on January 2 at 06:00 GMT.
EURUSD Daily: December 31, 2012
--- Written by Benjamin Spier, DailyFX Research