So what happened to that Euro decline? As I mentioned in yesterday’s opening comments, there were mass calls for the Euro to drop against the safe haven US Dollar following a rally related to the Greek aid agreement. Instead, the Euro popped back above 1.2900 against the US Dollar and climbed an additional 50 points during the North American session. The rally followed comments by US House Speaker John Boehner and President Obama that indicated optimism regarding a deal to avert the fiscal cliff.
The good vibrations continued today as the Euro and other risk-correlated currencies continued to rally during the European session, seemingly a continuation of yesterday’s sentiment. EURUSD is now trading only a few points short of 1.3000, which may be a key line of resistance.
Along with the better sentiment, there were some positive economic releases during today’s session. German unemployment rose by 5 thousand in November, which was a lot better than expectations for a 16 thousand rise in the amount of people looking for work. Also, Euro-zone economic sentiment beat expectations according to an EC indicator. Finally, Italy sold 10-year bonds for 4.45% versus a 4.92% in October, but the bonds still only sold for a total 2.98 billion Euros instead of a 3 billion Euro target. The rise in Euro did not seem to be a direct respons to any of these events.
In the North American session, US GDP (annualized) will be released at 13:30 GMT, 2.8% is expected.
EURUSD Daily: November 29, 2012
--- Written by Benjamin Spier, DailyFX Research