EURUSD Slips Under Supports At 1.3167, 1.3100 and 1.3075

• USD closes higher across the board as EURUSD slips under supports at 1.3167, 1.3100 and 1.3075.
• CAD falls in yesterday’s trade from fresh high versus the USD as Canadian growth falters in November, recording an unexpected 0.1% contraction.
• Commodity currencies fall back as Gold recovers a lot of lost ground into the New York close
• EURJPY falls back to close under 100 for the first time 6 days as USDJPY stops triggered down to 76.15 in yesterday’s trade and JPY closes stronger again in Asia overnight
• Flat Asian equity session helps USD strengthen as commodity currencies drift lower once again
• Markets nervous ahead of Portuguese bond auction results this morning
• European equities rise on opening which helps risk back on as USD slips back from earlier gains

Good morning. As the equity markets fell yeserday and concerns continued over Portuguese debt and the ongoing saga that is the Greek PSI debacle, the EURUSD drifted back under support on the ichi moko chart 1.3167 as US equity markets opened lower.

Once that level gave way it was a straight line down to 1.3115, (helped by a weaker than expected reading for January US Consumer confidence) before a minor bounce set in. Then as the Dow began to slip again the price slid under 1.3100.

The move that now sets up a potential double top at 1.32 and change was confirmed by a break under the previous January 2012 high at 1.3077.

I was aware that there were a lot of stop loss orders placed under this and indeed they all duly got triggered after the London close as the price skidded to 1.3041 before a bounce later in the US session that saw it lift back to 1.3090.

However the close in New York, which was important from a technical perspective, was underneath 1.3100 and whilst I would not rule out another flip of the 1.31-1.32 big figure points, I do think that yesterday’s move was critical if 1.3250 was to survive as a medium term top.

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The shine has most certainly come of the commodity currencies generally as the USD has picked up ground. That was well demonstrated by the CAD yesterday which key reversed after the release of data that showed the Canadian economy shrinking in November.

They are putting that down to one off Oil related issues, but it was a poor number nevertheless and the CAD weakened immediately after it had set a new high for the year at 0.9965, it actually closed above the previous day’s close (1.0015) ending the session at 1.0022.

The pound is outperforming the EUR and that saw EURGBP get sold quite aggressively through 0.8300 by the close and the price still under there this morning.

This morning European equity markets have opened higher and that has helped lift the EURUSD from earlier lows near 1.3025.

There is some resistance between 1.3075-1.3100 currently. Today sees Portugal due to tap the markets once again and the outcome of that auction could have an impact on the markets today.

The price action this morning suggests thin conditions still abounding so don’t be surprised if we get some sporadic moves today.