The EURUSD was lifted by the warm Spanish inflation data, with preliminary data showing a spike to a HICP rate of 1.5% y/y, well up on the 1.0% y/y median forecast and November’s 0.5% y/y clip. Spain is the first of the big Eurozone nations to report on December inflation, so the data sets up next week’s releases from the other key economies. EURUSD jumped just over 30 pips to a 1.0561 peak, since settling around 1.0550. EURJPY and other euro cross saw a similar price action. EURUSD’s 20-day moving average, at 1.0518, marks support; however, the break over this key level has been short lived in the last three month. I remain bearish EURUSD and took the opportunity to add to the position at 1.0552, Target 1 remains the 2016 low 1.0345 and Target 2 1.0160.
Overnight there was a short lived spike in EURUSD to 1.0653 as thin liquidity and low volumes together with final day year–end order squaring conspired to drive the USD to lows not seen since December 8.
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