Euro Edged Higher As Euro Zone Safety Net Talks Resume

The euro edged higher on Tuesday a day after the euro zone finance
ministers' meeting to discuss an increase of the rescue funds. No
decision was made at this stage disappointing investors who were
anticipating decisive steps by the ministers to defend the euro. More
uncertainty was born after Germany expressed its opposition to an
increase in the safety net, weighed further on the single currency.
Against the US dollar, the euro slid on Monday breaking below the 1.33
level and falling as low as 1.3269 from 1.3401. On Tuesday, the single
currency ticked higher recovering some of its losses supported by a
rise in Chinese equities, that plummeted yesterday, and talks that
Russia has committed in buying Spanish government bonds.

The Australian dollar rallied today versus the US dollar as it was
pushed higher by a rise in Chinese shares that lifted investors' risk
appetite. The Aussie, which suffered losses due to massive floods and
China's tightened monetary policy, rose as high as 0.9982 towards
parity level from 0.9861 hit yesterday.

Sterling inched up today helped by today's encouraging House Price
data and a higher than expected consumer confidence. The British pound
rose to a nearly two month high against the dollar today rising as
high as 1.5955 from 1.5868.

Gold ticked higher on Tuesday as a weaker dollar spurred demand for
the precious metal. Gold rose to 1366.35 from 1360.39 dollars an
ounce.

*Currency to watch out for: EURUSD & USDJPY*
The EURUSD pivot point is at 1.3350 with a preference to enter into
Short positions at 1.3340
The USDJPY pivot point is at 82.80 with a preference to enter Short
positions at 82.70

*Today's calendar and market movers:*
UK Consumer Price Index in December is forecasted to gain 0.7% MoM
UK Retail Price Index in December is forecasted to gain 0.7%
US Emprire Manufacturing Index is forecasted to rise to 12.30
Canada's interest rate decision is forecasted to be unchanged at 1%

*Equity Markets:*
The European bourses are mixed with the FTSE trading down 0.27%, the
DAX trading up 0.03% and the CAC down 0.20%. The NIKKEI and the HSI at
the time of writing are trading up 0.15% and down 0.75% respectively.
US equities were closed on Monday due to market holiday.

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Source: ActionForex.Com