ForexLive US wrap: Short-covering extends EUR/USD to 1.2972

US weekly jobless claims fall to 352k from 402k, lowest since 2008 US housing starts fall 4.1% US CPI unchanged in December m/m, core up 0.1%; y/y 3.0%/2.1% Belgian consumer sentiment falls to -16 from -12 in December Troika approves next bailout tranche for Ireland Philly Fed 7.3 in Jan from 10.3 in Dec Buba's Weidmann--German economy may have shrunk in Q4; QE would violate Treaty Fed auctions 10-year TIPS at -0.046% yield, a record low  Japanese economy minister encourages Japanese business to buy overseas commodities, companies  Greek debt talks productive: IIF S&P 500 rises 0.5% to 1315; Milan rises 2.5% US 10-year note yield rise 8 bp to 1.98%; Italy falls 4 bp to 6.39% WTI unch at 100.58; gold falls $2 to $1658 A strong day for the old-fashioned risk trade today as upbeat US jobless claims combined with comments from Draghi highlighting the effectiveness of the LTRO program helped accelerate the recent short-covering rally in EUR/USD. Prices broke out of a downward trend channel in place for more than 2-months on the daily charts at 1.2925. Resistance at 1.2945 put a cap on the market until late in the day when we managed a spurt as high as 1.2972 and 100.05 in EUR/JPY. Sellers are seen in the 1.2980/00 area near-term while 1.3080 is pivotal area of resistance should the rally extend that far on Friday.