Euro Edges Higher Helped By Central Bank Buying

The euro rallied today supported by talks of central banks buying the
single currency that triggered a euro short covering. Yesterday the
euro edged higher hitting 1.3465 versus the US dollar after Russia
revealed it will support the euro and after Europe's and Germany's
economic sentiment was significantly higher than expected. The single
currency extends gains today versus the dollar and moves higher
towards December's high at 1.3497, its next possible resistance level.
It hit an intraday high at 1.3487 gaining more than 1.8% since Monday
and speculators expect the euro to break above the 1.35 level.
Against the Japanese Yen, the dollar plummeted today falling as low as
82.11 from 82.67. The US dollar also fell against the Swiss franc
hitting an intraday low at 0.9571.

The Australian dollar climbed to a two week high against the weaker US
dollar helped by a report showing inflation in China eased in
December. China is Australia's largest trade partner and an easing
inflation lowers the need for tightening in China's monetary policy.
The Aussie is also helped by buying from central banks and a rise in
commodity prices. Today, the Aussie moved higher breaking above parity
level and reaching a high at 1.0065 dollars.

Sterling edged higher today extending yesterday's gains after Consumer
Price Index in December showed higher than expected figures. The rise
in CPI raises expectations for a rise in interest rates in the UK in
the near future. On Wednesday, sterling rose as high as 1.6034 versus
the dollar from 1.5956. Investors anticipate UK Jobs data revealing
later today.

Gold ticked higher today as a weaker dollar spurred demand for the
precious metal. Gold rose as high as 1375.18 dollars an ounce from
1365.50 dollars an ounce.

*Currency to watch out for: EURUSD & USDJPY*
The EURUSD pivot point is at 1.3425 with a preference to enter into
Long positions at 1.3425
The USDJPY pivot point is at 82.65 with a preference to enter Short
positions at 82.55
*Today's calendar and market movers:*
UK Jobless Claims Change in December is forecasted to fall -1.4K
US Housing Starts in December is forecasted to fall to 0.55M
*Equity Markets:*
US equities closed positive on Tuesday with the S&P500 traded up 0.14%
and the DJIA unchanged. The European bourses are also positive with
the FTSE trading up 1.18%, the DAX trading up 0.92% and the CAC up
0.94%. The NIKKEI and the HSI at the time of writing are trading up
0.36% and up 0.85% respectively.

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Source: ActionForex.Com