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Euro Inches Towards 1.300 in Asia as Squeeze Continues

Last updated 1/20/2012 1:49 AM ET (GMT -5) 0 Comments - Add your comment

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Boris Schlossberg

Director of Currency Research, GFT

@import url(/css/cuteeditor.css); Trading was very subdued in Asian session trade as many traders took an early holiday ahead of the Chinese New Year next week with equities trading higher as Nikkei closed up 1.47% while the Hang Seng rose 0.51%. The HSBC Chinese Manufacturing PMI printed at 48.8 barely rising from last month’s reading of 48.7.

After bottoming out in November of last year Chinese manufacturing activity has stabilized but below the key 50 boom/bust level indicating that growth in the sector will modest at best in H1 of 2012. The news offered no support for the Aussie which remained in very tight range just above the 1.0400 figure.

The EUR/USD meanwhile inched towards the the key 1.3000 figure as positive risk sentiment took it to  a session high of 1.2980. The pair faces a slew of sell orders at the big figure but specs are likely to push for test as the day proceeds to see if they can shake out the weak shorts. Barring any unexpected news from regrading EZ sovereign credit, the mood of the markets remains positive and the path of least resistance for the EUR/USD is up as the short squeeze continues.   

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About The Author

Boris Schlossberg began his Wall Street trading career more than 20 years ago at Drexel Burhnam Lambert. There, he traded nearly every type of financial product on the market in the U.S., from equities and options to stock index futures and foreign exchange. His innate ability to analyze market information and use it to trade has helped him become an industry-recognized, “go to” trading professional.

These days, whenever the markets move, many organizations turn to Schlossberg for his take on the situation. He is a weekly contributor to CNBC's Squawk Box and a regular commentator for Bloomberg radio and television. His daily currency research is widely quoted by Reuters, Dow Jones and Agence France Presse newswires and appears in numerous newspapers worldwide. Schlossberg has written for publications like SFO magazine, Active Trader and Technical Analysis of Stocks and Commodities. He is also the author of Technical Analysis of the Currency Market and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Kathy Lien. He joined GFT in 2008.