Forex Intraday Round-up: EUR Keeps Upward Momentum Supported by ECB’s Mario Draghi Optimism

on Dec 18, 2012
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**EUR/USD**

The EUR/USD kept its upward momentum during intraday trading and at 11.10 GMT was changing at 1.3177/85 or 0.13 percent higher than yesterday. The pair reached its week’s high at 1.3188 after the debt auctions results in Greece and Spain.
The Greek government managed to get improved yields for its €1.3 billion worth of 3-month T-bills, yielding at 4.11 percent compared to the previous 4.2 percent. Spain’s 3-month bills yielded at 1.195 percent for €1.5 billion, while €1.95 billion of the 6-month T-bills were sold at 1.609 percent. Both countries sold more debt than they initially anticipated.

“The break of the 1.3120 and 1.3170 resistance changes the bias to positive and opens the way for a test of 1.3280 and 1.3380”, FXstreet.com quoted Deltastock analyst Stoyan Mihaylov. He also expects critical support for the pair at 1.3120.
Mario Draghi, president of the European Central Bank, appeared optimistic today saying that reforms in the Eurozone have revived confidence and will help foster an economic recovery in the second half of 2013. “The impression that one has of this year, at least of the second part of this year, is of a gradual improvement in financing conditions which is one of the reasons why we foresee a beginning of a recovery in the second part of next year,” Mr Draghi said in testimony at the European Parliament’s Economic and Monetary Affairs Committee.

EU finance ministers set March 2014 as the target date when the ECB is supposed to have taken supervisory powers over the region’s 6,000 lenders. Mr Draghi said he is hopeful that the supervisory mechanism will be effective but insisted that it is as important to implement it well as it is to do it as soon as possible.
**GBP/USD**
The pound traded higher against the US dollar with the GBP/USD pair reaching an intraday high of 1.6228. UK inflation reports were released today showing that inflation dropped by less than expected. The UK Retail Price Index declined year-on-year from 3.2 percent to 3 percent, while the monthly figure came at 0 percent, below analysts’ expectations of a 0.2 percent increase.

The November Consumer Price Index (CPI) remained at 2.7 percent, above the 2.6 percent consensus, while the monthly figure rose by 0.2 percent as predicted. The Producer Price Index (PPI) data showed contraction on an annualized basis from 0.1 percent to -0.3 percent but higher than the forecast of -0.5 percent. Monthly PPI climbed by 0.1 percent instead of declining -0.1 percent.

!m[GBP Extends Gains, JPY Remains Weak](/uploads/story/1051/thumbs/pic1_article_inline.png)
“Overall bulls remain intact for fresh extension higher that would focus key 1.6300 resistance zone. However, corrective easing may precede rally, as hourly indicators are reversing”, wrote Windsor Brokers analyst Slobodan Drvenica as quoted by the FXstreet.com
**USD/JPY**
FXstreet.com quotes Lee Hardman, forex analyst at the Bank of Tokyo Mitsubishi, who noted that the yen remains defensive against the US dollar due to anticipations of further monetary easing at Thursday’s Bank of Japan monetary policy meeting.
At 12.00 GMT the USD/JPY was trading slightly in negative territory at 83.83/87 or 0.05 percent lower than yesterday.

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