10-Yr T-Note: -08/32..1.644%.. USD-JPY: 77.59.. EUR-USD: 1.2917

The USD Index failed just shy of the 80.00 level in early action, and has slipped back to 79.50 as selling set in.

EUR-USD is +50 pips at 1.2925 as it appears to be on track for its first gain in four days. Early weakness saw buyers come in to support the 1.2825 level that is aided by the 200-Day Moving Average, but the real buying began after details of Spain’s 2013 budget crossed the wires.

The budget will cut spending by EUR40-B and look to cut its deficit to 4.5% of GDP.

Eurozone data will come fast now as German retail sales, French consumer spending, and CPI Flash Estimate will be released tomorrow.

GBP-USD is +75 pips at 1.6240 as trade pressures resistance in the 1.6250 area. The gains come after Britain’s GDP was revised up to -0.4% Q-Q (-0.5% Q-Q prior). Britain’s data continues to see a run of better than expected results following the Olympics with many hoping the momentum carries over into the final part of the year. The 1.6500 area will be Key should the Bulls penetrate 1.6250 resistance.

USD-CHF is -25 pips at .9365 after sellers emerged near the 200-day moving average. Should dollar weakness persist, look for an important test of the .9250 area. Switzerland’s KOF Economic Barometer will be released Friday morning.

USD-JPY is -10 pips at 77.60 and is on track for its seventh consecutive losing session. Traders remain on the lookout for a close below 79.48 which would represent a seven-month low. Japanese data is heavy as household spending, Tokyo core CPI, preliminary industrial production, and retail sales are all due out overnight.

AUD-USD is +80 pips at 1.0455 as trade holds near session highs. The hard currency has been a beneficiary of the flight back into risk assets, and is on pace for its best close in 4 days. The 1.0550 area should be watched closely with a push through the level resulting in test of the February highs. Australia’s private sector credit will cross the wires tonight.

Also due out is China’s HSBC Final Manufacturing number.

USD-CAD is -50 pips at .9795 with today’s selling erasing all of Wednesday’s gains. Thursday’s selling represents the 1st losing session in more than a week, and is the only serious selloff in more than 2 wks. Resistance in the .9850 area remains Key. Canada’s GDP will be announced Friday morning.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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