The single currency could find new support from Russia this time by promises of considering buying Spanish debts and this consideration is coming after Japan had given a pledge for buying European bonds following China for restoring confidence in the European debt market. The single currency could come over 1.34 again after easing back below 1.33 versus the greenback earlier this week as the market uncertainty about the next EU Financial ministers meeting this week in Brussels as the calls for adding new funds to the EU and the IMF package for lending the EU debt ailing economies have increased recently putting pressure on the Fin Ministers to come out with what's new to add more confidence in the debt market. The single currency should meet the next important resistance at 1.35 soon after passing above 1.34 supported by better than expected EU ZEW economic sentiment of January could reach 25.4 and the markets were waiting for 17.3 from 15.5 in December while the next supporting level is expected to be at 1.326 where it has dropped to this week and this level can be followed by 1.309 and then the recent bottom of the pair at 1.287 level.

The British pound could also continue passing above 1.60 versus the greenback supported by strong inflation figures of December as UK CPI has reached 3.7$ yearly while it was expected to be just 3.3% while the monthly figure has been 1% and it was expected to be just .7% after UK Jan Right move housing prices index has risen up by .3% after falling in December by 3% and RICS Housing prices balance had improved to -39 in December 2010 from -44 in November while it was expected to be just -42 to be in line with the recent MPC members meeting last week which has shown their worrying about inflation as UK CPI is still well above its 2% target and also above 3% in the recent months and it can accelerate further to 4% as we have seen UK CPI of December coming at 3.7% which can show that the UK economy is exposed to stagflation risks this year as it has become ruled out to have a new added funds to the BOE 200b Stg buying bonds plan, if there is a new tightening action from the MPC to come for fighting the inflation upside risks as Andrew Sentence the MPC voting member has called for hiking the interest rate by 25 basis points in their last meeting while the economy is not yet at the shape which does not need of its easing measures. The cable rose to 1.6058 before retracing some of its recent gains to 1.594 but it is still expected to find intermediate support at 1.5835 where it has tried to form a new base for ascending up while breaking this level can expose it to fall further to 1.57 then 1.558 while the main supporting level is now at 1.534 where it was its recent bottom while the next resisting level can be at 1.6092 then its recent main top at 1.6296.

God Willing, it is important to wait today for December UK jobless claimant change to be -1.4k from -1.2 in November and ILA unemployment rate to be 7.9% and also we wait from US for December housing starts to be .550m from .555 in November and building permits to be .56m from .53m in November. It is important after that to wait for tomorrow Asian session looking for the Chinese inflation to ease back to 4.7% after reaching 28 months high in November at 5.1% trigging PBOC to hike the interest rate 25 basis points and to request for reducing the banking sector reserved amount of liquidity available for lending by another .5% after cutting it 6 times last year and it's important too to wait for its Q4 GDP which is expected to get down from 9.6% in the third quarter to 9.4% yearly while its industrial productions are expected to up by13.6% in December from 13.3% in November and also its yearly retail sales to be up y/y by 18.9% from 18.7% in November.

Kind Regards

FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com