Greece Talks Extended, Euro Holding Above 1.3000

U.S. Dollar Trading (USD) stocks pared back some of the Jobs data with Greece missing the deadline for a deal and extending talks to avoid a default amongst warnings from the rest of Europe to find a solution. Traders continued to buy on pull backs however and stocks rallied off their lows in the US session and the EUR/USD and other risk assets bounced into the close. In US stocks, DJIA -17 points closing at 12845, S&P -1 points closing at 1343 and NASDAQ -3 points closing at 2904. Looking ahead, FED Chairman Bernanke Speaks. December Consumer Credit forecast at 7.7bn vs. 20bn previously.

The Euro (EUR) dipped towards 1.3000 as Greece missed the deadline to come to an agreement with the troika about a second bailout package and continued the talks into the night with the IMF/EU. German Industrial Orders jumped 1.7% in December vs. a -4.9% drop in November. EUR/JPY is providing support but EUR/GBP is still very heavy. Looking ahead, December Industrial Output forecast at -0.3% vs. -0.6% previously.

The Japanese Yen (JPY) the USD/JPY failed to extend gains and fell back as the USD came under pressure in the US session. The Y76.50 is the support and holding firm so far as the market looks to more US data and the EUR/JPY to see if Yen weakness can continue this week. The MOF confirmed more stealth intervention in the past 3 months but only through the USD/JPY.

The Sterling (GBP) Cable was bought aggressively on a pullback to 1.5730 to close back above 1.5800. The market expects the BOE to increase the Asset purchase program by 50bn at Thursday’s meeting. EUR/GBP is moving towards the 0.8250 support and a break could lead to 0.8000 on the cross and 1.6000 on the major. Looking ahead, BRC Retail Sales previously at 2.2%.

Australian Dollar (AUD) the AUD/USD consolidated the rally on Friday but did test the 1.0680 support level after the December Retail sales fell -0.1% vs. 0.2% forecast. The AUD/JPY was also supported below Y82 with traders looking to the firm resistance at Y85 in coming weeks which will correspond to the 1.1000 all-time high on AUD/USD. Looking ahead, RBA Rate announcement forecast to cut to 4.0% vs. 4.25% previously.

Oil & Gold (XAU) Gold fell back for a second day as the market continued to liquidate long positions searching for support eventually found under $1720. OIL/USD pivoted the $97 but the selling has stopped seen last week as the energy fell below $100.