Focus Shifts to EU Leaders’ Summit

The EUR/USD pair hit 1.3139 yesterday as optimism European Union leaders meeting today in Brussels will take steps toward resolving the debt crisis increased demand for the euro. Recently, the euro has been climbing steadily on hopes Spain will ask for a bailout next month and positive sentiment from Moody’s rating agency affirming Spain’s investment grade rating late on Tuesday. A possible line of credit to Spain and the some easing of German opposition for aid to debt-plagued countries are more than likely to support the euro in the near term. Breaking above a descending trend line originating in mid-September is also very positive. The pair is most likely headed for the September high of 1.3170, if the bulls are able to maintain control.
The Australian dollar strengthened against the USD after China’s National Bureau of Statistics said that gross domestic product rose 7.4% in the third quarter from a year earlier. Although this is the slowest pace since the first quarter of 2009, it matched expectations. The report showed that the economy is showing signs of stabilizing. However, there is a strong barrier ahead of the bulls. The AUD/USD pair has to break through the 1.0400 barrier in order to continue climbing.
The Asian stock markets opened higher today lower today as the U.S. Commerce Department figures showed that housing starts surged to the highest level in four years. NIKKEI started the day at 8,886.56, previous close was 8,806.55. HANG SENG opened at 21,490.90, previous close was 21,416.60. Director of cash sales at Credit Suisse, Stefan Worrall said “We’re seeing lots of volume again today, the weak yen is a reflection of the atmosphere being risk-on. You’ve got China up, Europe looking a bit better and earnings in the U.S. looking better”.
EUR/USD is trading at 1.3086 by the time of typing and for today resistances are located at 1.3104 and 1.3158. Support levels are 1.3069 and 1.3015.
GBP/USD is at 1.6122. Resistance levels are located at 1.6140 and 1.6200. Supports are located at 1.6100 and 1.6075.
USD/CHF is trading at 0.9242 by the time of typing and for today resistances are located at 0.9267 and 0.9290. Support levels are 0.9220 and 0.9185.
AUD/USD is trading at 1.0382. Resistances are located at 1.0400 and 1.0451. Support levels are 1.0361 and 1.0327.
The economic calendar is light today. U.S. Unemployment Claims data will be released at 13:30 GMT. Philadelphia Fed Manufacturing Index will be released at 15:00 GMT.