CFD Markets News and Forecasts — 17-01-2011

EUR/USD holding tight around $1.3300, with traders reminding that the level holds the strike of a maturing option at 1500GMT. Martin Luther King holiday in the US subdues market as we move through the European afternoon. Support seen at $1.3280/70 ahead of $1.3250/45. Resistance $1.3340 ahead of $1.3350. Rate currently trades around $1.3285.

EUR/GBP eases back toward earlier lows/suport at stg0.8350. A break below this level to open a deeper move toward stg0.8335/30.

Traders add that stops seen placed on EUR/USD above the earlier reported offer level at $1.3350. Confirming the next resistance/offers seen at $1.3375/85. Rate currently trades around $1.3300.

The euro fell against the dollar, snapping a five-day gain, on concern the region’s debt crisis will worsen even as European finance ministers meet today to hammer out a new strategy to stem the contagion.
German Finance Minister Wolfgang Schaeuble said on radio station Deutschlandfunk that the nation opposes increasing the size of the euro area’s bailout fund.
“There’s plenty of reasons to be circumspect on the euro after the rally last week,” said Jeremy Stretch at Canadian Imperial Bank of Commerce. “If the markets perceive Germany isn’t so happy to back an increase in the bailout fund that leaves you with a less supportive backdrop.”
Bank of Japan Governor Masaaki Shirakawa said European financial markets remain unstable because of concern about the long-running crisis.
“Financial markets in Europe continue to be volatile because of concern about sovereign-debt risk,” Shirakawa said at a quarterly meeting of the BOJ’s branch managers today in Tokyo. At the same time, “global financial markets, on the whole, have maintained stability,” he said.
Australia’s dollar dropped to a six-week low versus New Zealand’s on concern record flooding will curtail economic growth.

EUR/USD fell to $1.3240 before rate recovered to $1.3340.

GBP/USD held within the $1.5830/70 range before recovered to $1.5955.

USD/JPY fell from Y83.00 to Y82.30 before back to Y82.53.

Volumes and flows light, with US markets closed for the MLK holiday.

AUD/USD backing off from $0.9969 highs after aussie tracks latest leg up in the euro. Some trendline resistance seen at $0.9970/75 with talk of offers $0.9985/95. Aussie trades $0.9953/55

GBP/USD extends recovery to the top end of latest reported retail sell interest o $1.5935. Rate retains a bullish tone while corrective pullbacks remain shallow, one trader suggests, adding that next resistance seen at $1.5950.

GBP/USD extends recovery to $1.5917, but reported offers to $1.5920 manage to counter and take rate back to $1.5900. One trader reports that retail sell interest now seen concentrated in the $1.5915/35 area. Above here and rate can extend to $1.5950/60. Support $1.5880.

GBP/USD triggered option barrier at $1.5900 on the move to $1.5904 with profit take sales, along with mentioned retail sell interest above $1.5900, countering the move and taking rate back to $1.5892. Next resistance seen at $1.5920.