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Euro Maintains Gains After Italy`s Bond Auction

Publish Date29/11/2012 10:36:12 AM

Last Update29/11/2012 12:21:37 PM

The U.S. dollar is back under pressure as comments of key Republican official John Boehner lifted hopes of a deal being reached to avert the so-called fiscal cliff. Meanwhile, President Barack Obama said on Wednesday he hoped to reach an agreement with Congress before Christmas, giving markets further relief.

The euro gained against the U.S. dollar and Japanese yen as market put Greece back in the backseat for now, and focus on fiscal cliff talks.

The EURUSD rebounded strongly yesterday after testing the 50-days SMA and 1.2880 key broken resistance which turned into support now, to record an intraday session high today at 1.2989.

Yields on Italy’s bonds dipped in treasury auction Thursday, the country sold 2.98-billion euros of 10-year bonds at 4.45% yield versus 4.92% on October 30, the lowest level in two years, while yields on 5-year notes dropped to 3.23% on 3-billion euros, down from 3.8% in the prior auction.

However, the EURUSD pair is facing key overhead resistance levels, in the form of major long term descending trend line just around 1.3000 level. A sustained break above 1.3000 may extend the bullish wave towards the previously recorded highs last September at 1.3169.

The yen has been under pressure over the past few weeks on speculation of chances of aggressive monetary easing in Japan following a probable change in government next month.

The USDJPY has been in a corrective pullback after recoding multi-month high at 82.82; however price has found support at 81.75 level. In general, the pair is expected to be well bid above 80.60, and could push towards 2012 high at 84.17.

 

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