Dollar's earlier strength faded in European session and turns sideway since then. The greenback continues stay in tight range after release of positive, but less than impressive data from US. ISM non-manufacturing index was back above 50 but just managed to rise to 50.1 versus expectation of 50.5. The ADP report showed US economy cut -84k jobs in the private sector in December, smallest contraction since March 2008 but was slightly worse than expectation of -75k. Nevertheless, November's number was revised up from -169k to -145k. Focus now turns to FOMC minutes to be released in the US afternoon.
Euro dipped earlier today as ECB Executive Board member Stark was quoted saying that the markets are deluding themselves when they think at a certain point the other member states will put their hands on their wallets to save Greece. The comment suggests that EU might not bail out Greece if the debt problem worsens. However, there is also thought that Stark is merely using tough rhetoric in an effort to press the Greek government, and Greek public opinion, into accepting major public spending cuts to reduce the budget deficit. Data from Eurozone saw PMI services revised less than expected to 53.6 in December, PPI rose 0.1% mom in November versus consensus of 0.2% mom, industrial new orders dropped more than expected by -2.2% mom in October.
Sterling's brief recovery also faded quickly on rumors that two former Labor Party cabinet ministers called for a secret ballot on Prime Minister Gordon Brown's leadership ahead of an election. Data from UK were not encouraging neither. Nationwide consumer confidence dropped more than expected to 69 in December. PMI services also rose less than expected to 56.8 in December.
Today's development left commodity currencies as the biggest winner again. EUR/AUD dives sharply to as low as 1.5667 so far. Downside momentum in the cross is reaccelerating The long term down trend from 2008 high of 2.1027 is still in progress for 2007 low of 1.5472.
USD/CHF Mid-Day Outlook
Daily Pivots: (S1) 1.0272; (P) 1.0316; (R1) 1.0381; More
The break of 1.0324 minor support delays the immediate bullish view on USD/CHF and argues that consolidations form 1.0506 is possibly still in progress. Intraday bias is turned neutral for the moment. While another fall cannot be ruled out, downside is still expected to be contained by 1.0175 resistance turned support and bring rally resumption. Break of 1.0420 resistance will indicate that whole rise from 0.9916 is possibly resuming and should target 1.0590 medium term support turned resistance next.
In the bigger picture, medium term fall from 1.1963 has completed with five waves down to 0.9916 already, on bullish convergence condition in daily MACD. Also, the three wave consolidation from 1.2296 should also be finished too. Current rise from 0.9916 is expected to extend further to medium term trend line resistance first (now at 1.1032). Sustained trading above the trend line will affirm the case that long term rise from 2008 low of 0.9634 is resuming for another high above 1.2296. On the downside however, a break of 0.9959 support will invalidate this bullish view and argue that medium term down trend in USD/CHF is still in progress for 0.9634 low.