EUR/USD: 1.3245Ongoing enthusiasm for a positive outcome on the fiscal cliff negotiations, along with a marginally better than expected German IFO survey of business sentiment, have been the main themes of the session, meaning diminished safe haven demand for the dollar, and helping the Euro to a high of 1.3307 before a mild retreat back to levels not too far removed from this time yesterday.
Technically, having taken out the 1.3240 and 1.3280 resistance, the next point to overcome, above today's high at 1.3307 is at the 27 March high at 1.3385 and then the 24 Feb high at 1.3486. Given the overbought state of the 4 hour oscillators and the fact that they are tending to roll over, to turn a little lower, I am not sure that there will be too much upside in the coming session and we may indeed look to turn a little lower.
Support is nearby though, with the rising trend line likely to see buyers at around 1.3220. Below that, there is minor 1.3185 support, ahead of Fibo inspired bids that should be seen at 1.3165 (23.6% of 1.2660/1.3307). The hourly MACD's have turned sharply lower and thus I suspect we are going to find the upside a little difficult today, but with liquidity rapidly running out I would keep stops pretty tight in case of an exaggerated move.
Look for 1.3200/1.3300 to cover it today, with any volatility to be guided by the German PPI and later on the US GDP. Overall it looks as though it may be the downside that comes under a bit of pressure but enthusiasm is waning as sharply as liquidity and I am not expecting too much either way.
