Daily Market News - 19.12.2016 by CentroFX
The China/US Tension continues to simmer
It is a quiet start to the final full trading week of the year, although the German Ifo data will be the stand-out feature in the morning session. As noted, the first data release is expected at 09:00 GMT, with the release of the IFO Business Climate index for December. The Business climate index is seen at 110.9, up from 110.4 in November. Business expectations are seen at 106, up from 105.5. At 10:00 GMT, the euro area October construction orders data will cross the wires.
The ECB will call for bids on the latest 7-day MRO at 14:40 GMT, before publishing the latest PSPP Bond buying data at 14:50 GMT Across the Atlantic, the only US data set for release comes at 15:00 GMT, when the flash December Market Services Index is released. In the UK, at 15:30 GMT, Prime Minister Theresa May will update Parliament following the December 15 EU Summit.
The break and close above the ¥116.12 resistance Wednesday ended correction talk, reconfirmed a bullish bias and sees bullish focus on tests of the 2016 high from Jan 29. O/B daily studies are seen as the key concern for bulls. The failure to retest Friday’s high is less than ideal for bulls with daily studies O/B and looking to correct. The ¥116.87 support remains key with a close below to confirm an easing of bullish pressure and below ¥116.12 hinting at a move back to ¥114.66 initially.
The US dollar was little changed from Friday's close in New York with one modest outlier, dollar-yen was pressured a little lower with longs said to be profit-taking ahead of the festive season. Dollar-yen opened at Y117.90 and held a Y117.25 to Y118.03 range, last at Y117.35. Euro-dollar consolidated in a $1.0428 to $1.0469 range, last at $1.0460. Aussie-dollar opened at $0.7292 and held a $0.7273 to $0.7313 range. The release of the MYEFO saw the Government dodge a ratings downgrade, for now. Aussie-dollar was last at $0.7296. Meanwhile, the pound dropped from $1.2504 to $1.2448, the move was said to be sterling-yen driven. Cable was last at $1.2471.