The euro advances ahead of Spanish and Italian bond selling

The European single currency rose against majors ahead of the
announcement of results of the Spanish and Italian bond selling due
later in the day.

After a Portuguese auction yesterday that was described by many
analysts as successful, as it witnessed a decline in 10-year bond
yields and rise in demand, it is the turn on Spain and Italy to sell
long-term bonds today.

The Portuguese bond selling managed to restore some confidence in
markets pushing the euro up today, yet the euro remains under pressure
ahead of the Spanish and Italian auctions as well as the ECB's
announcement of January's rate decision.

The yield on German two-year bunds rose to the highest level in three
weeks on speculations the ECB will not announce bond purchasing plans,
instead it will urge European economies to do there best to contain
the debt crisis.

The ECB is predicted to leave interest rate steady at 1.00% today, to
continue its support to growth that started to slowdown in the third
quarter.

On the other hand, the dollar index, which tracks the dollar movements
versus a basket of major currencies, is now little changed after
touching a high of 80.23 and a low of 79.92, before the release of
jobless claims at 13:30 GMT.

Concerning the euro-dollar pair, it is showing slight incline on the
daily charts yet the 4-hour and 1-hour charts are pulling the pair to
the downside, where it is currently trading at 1.3140 doing attempts
to remain above 1.3120.

So far, the pair has recorded a high of 1.3170 a low of 1.3087 while
the trading range for today is among the key support at 1.2920 and the
key resistance at 1.3365.

Moving to the royal pair, it pared some of its advance over the past
four sessions as it fell to 1.5740, before the announcement of the
BoE's rate decision for January later on today.

Data released today from the UK showed that manufacturing rose to 0.6%
in November from 0.4% in October and industrial production soared to
0.4% from the revised -0.1%.

The pair has recorded a high of 1.5782 and a low of 1.5716, whereas
the trading range for today is among the key support at 1.5620 and the
key resistance at 1.5910.

With regard to the dollar-yen pair, it dipped on the daily charts for
the second day to 82.90, despite the drop in Japanese machinery orders
by 3.0% in November from October.

So far, the pair has recorded a high of 83.15 and a low of 82.89,
whereas the trading range for today is among the key support at 81.05
and the key resistance at 84.25.
Source: Fxstreet.com