Currency market. EUROPEAN session review: US Retail data in focus

Data released: 

07:45 GMT France Consumer Price Index (EU norm) final (YoY) (Nov) 0.8% 0.8% 0.7% 

07:45 GMT France Consumer Price Index (EU norm) final (MoM) (Nov) 0.0% 0.0% -0.1% 

08:30 GMT Switzerland SNB Interest Rate Decision (Dec 12) 0% _ 0% 

10:00 GMT UK CB Leading Economic Index (Oct) 0.4% - 1.7% 

10:00 GMT EMU Industrial Production w.d.a. (YoY) (Oct) 0.2% 1.1% 0.2% 

10:00 GMT EMU Industrial Production s.a. (MoM) (Oct) -1.1% 0.3% -0.2% 

The dollar held its ground for a second day Thursday after a string of losses since the start of the month, with the fate of a U.S. budget deal in focus, along with its implications for Federal Reserve policy. 

Investors waited for retail-sales data from the U.S. to gauge if they’ll weaken or strengthen the case for the Federal Reserve to taper its asset purchases next week. 

EURO 

Data released showed the Eurozone industrial output fell 1.1% in October versus a 0.3% rise expected, while YoY it grew 0.2% well below the 1.1% increase expected. 

ECB expects Eurozone GDP to fall 0.4% this year and pick up to 1.1% growth in 2014 and 1.5% in 2015. 

EUR/USD challenged $1.3800 again. Above resistance comes at $1.3830 (Oct 25 high). Initial support is around $1.3720 with a break below opens the way to support near $1.3620 ahead of $1.3600. Experts noted EUR/USD may go higher if 1.3830 will be broken but the ECB is playing with fire. 

POUND 

The pound rose, snapping its biggest decline in two weeks versus the dollar, before Chancellor of the Exchequer George Osborne goes before lawmakers to explain his year-end budget statement delivered last week. 

GBP/USD recovered from session lows on $1.6350 to session high on $1.6415, but still below recent high on $1.6465. Above resistance comes at $1.6520 and $1.6625 (August’2011 highs). Currently support comes at $1.6350/40 (Nov 12 lows). 

YEN 

Japanese cabinet approves JPY 5.46 trln extra budget for 2013/14. 

USD/JPY currently holds at Y102.70. Resistance is around Y103.40 (Dec 3 highs) with a break above opens the way up to Y103.70 (May 22 highs). Below Y102.15 support comes at Y101.60 (Dec 5 lows). 

DATA AHEAD: 

At 13:30 GMT US Initial Jobless Claims will be in focus. 

The same time US reports Nov Retail Sales (median 0.3% after 0.4%) and Retail Sales ex Autos (median 0.2% after 0.2%). 

At 15:00 GMT Us Oct Business Inventories due to come. 

At 18:05 GMT BoC Governor Poloz speaks.

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