Dollar and yen retreat mildly as the situation for Fed chairman Bernanke to win the vote for second term became more optimistic over the weekend. Senate Republican leader Mitch McConnell said in a interview that Bernanke will have bipartisan support in the Senate. Intrade, a Web exchange for futures contracts based on political outcomes, today saw 95% odds Bernanke would be confirmed, up from 88% on Jan. 23. A senate vote on Bernanke's confirmation will be held this week and Bernanke will need to 60 votes to avoid procedural hurdle.
Dollar and yen are both mildly lower today in Asia but the retreat is so far limited. Commodities also recover with crude oil up slightly to 74.73 while gold is back above 1100. Dollar index continues to consolidate below 78.81 and intraday bias remains neutral. Deeper retreat to 4 hours 55 EMA (now at 77.76) cannot be ruled out. But after all, downside should be contained above 77.41 support and bring rally resumption. Above 78.81 will target 61.8% projection of 74.19 to 78.45 from 76.60 at 79.23. Rise from 74.19 is still expected to extend to 38.2% retracement of 89.62 to 74.19 at 80.08 at least.
The economic calendar is rather light today. Australia PPI unexpectedly dropped -0.1% qoq in Q4. German Gfk consumer sentiment for February dropped to 3.2. US Existing home sales is expected to drop to 6.0M annualized rate in December.