euro slightly… … higher on the session.

Trading volume was a
little to the downside as U.S. bond markets observed the Veteran's day
holiday. Subsequently, euro zone economic news was unimpressive with
German consumer prices the sole report on the day. Revealing that
inflation was well contained, countering earlier rhetoric by policy
makers, the monthly change in prices was kept unchanged for the month.
On the annualized basis, the overall figure actually decreased to 2.3
percent, leaving little speculation for any interest rate hike
materialization in the near future.

UK Inflation Expectations
Traders are looking ahead to Monday's report on producer prices in
offering further suggestions that the Bank of England will leave the
official repo rate at the current 4.50 percent. Expected in the
release, producer ouput prices are to have increased on continually
higher raw material prices. As a result, in saving the bottom line,
producers are to have passed on the costs to the consumer, continuing
the 2.4 percent rate of inflation.

Technically Speaking
A touch of a long-term 73.6 fibo level at 0.6705 created a strong
support level for the EURGBP pair to make a 4-month low before
rebounding back to current levels. Previous supprt at 0.6741 may not
offer much topside resistance but the 23.6 fib on this chart coinciding
with a 73.6 fib on a longer term chart makes for a sizable level at
0.6751.

EURUSD

The Grand Coalition
Today marked the first time a woman chancellor was elected to the
German government as both political parties formally inked an agreement
establishing a coalition government. Alleviating some uncertainty as to
the political situation in the Euro zone's largest economy, the
formation of the government may add some unwanted pressure on the
underlying spot as budget reform talk grew louder. One of the main
policies of the coalition involved tackling the country's budget
deficit. In order to accomplish this goal, policy makers have decided
to raise taxes and lower public spending. The legislation follows
yesterday's mention of an increase in the 3 percent “wealth tax”
and the VAT. As a result, consumer spending looks to weaken further as
consumers will be paying an increasing amount to the government and not
on their own economy. This now brings to light the possibility that
Angela Merkel's previous platform will not come to fruition, dashing
hopes of positive reform in the economy.

Technically Speaking
The Euro made a rather weak attempt to crawl out of its hole against
the dollar in trading today. A falling channel top at 1.1760 could
spell trouble for a euro rally while a 23.6 fib reinforcing a range top
at 1.1790 would bring dollar bids. If the dollar reinstitutes its trend
the 1.1670 will offer little resistance to the move. However, a very
long term 50.0 fib at 1.1642 could keep the pair in line.

USDJPY

Self-Sustaining Growth
The release of third quarter GDP rallied some confidence in the Yen and
Japanese economy this morning. Beating expectations by expanding 1.7
percent in the three months ending in September, economic expansion is
one less barrier to keep the BoJ from abondoning their ultra-loose
monetary policy. Futher sifting through the release provides another
reason for yen bullishness: domestic consumption. Over the period
consumer spending and business investement contributed to growth while
exports actually were a detriment. With energy prices on the retreat
and optimism ramping up, the island nation looks to be heading for
another period of a Japanese driven growth rather than recieving money
from abroad.

Technically Speaking
The unstoppable rally the dollar has had against the yen is once again
face to face with another make or break level. A three-year fib
retracement places a 50.0 fib level smack in the pairs path at 118.41.
Looking for support levels is quick work. Multiple rising trendlines
look are looking to contain an selloffs in the pair. However, a two
week rising trendline in conjuction with a 23.6 fib of the recent two
week rally could be the straw that breaks the camels back on the way
down.

Sending money abroad? Converting currency?