Yesterday the dollar got sold off during the New York session and EUR/USD reached 1.49 in a move that retraced heavily in the next few hours.

EUR/USD was unable to sustain gains yesterday and early this morning at the Asian session. So, when Europe entered the markets this morning, the unavoidable happened! The pair dropped 100 points breaking all important support levels, firstly at 1.4780 and then 1.4750. The pair found temporary support at 1.4725 at the time of writing, but a closer look at the charts shows that there is room for more gains in the greenback, providing that New York market will have the same approach.

Yesterdays data from the US showed a worse than expected consumer confidence number, however with traders already pricing in the worse, it wasn’t enough to put more pressure in the dollar.

Today, traders are anticipating the Durable Orders from the US and also the existing home sales. The forecasts show some slowing in the Housing numbers but a pick up in the order numbers. If the data however surprise to the upside, we might see further gains in the dollar and a possible break of 1.47, with next target 1.4625.

It important for the euro bulls to keep the 1.46 level, because a potential break might jeopardize the uptrend and put a temporary stop in the euro buy madness that’s been going on since the summer.

However, before you start buying the dollar, keep one thing in mind: 1.50 can still be targeted in the next coming weeks, as the big players might seize the opportunity and buy on dips for another try at the almighty 1.50.,p>

So far, carry traders are back and it seems that USD/JPY has broken important resistance levels at 108.85 and then 109.25 and there is scope for important 110.60 maybe in the coming weeks.

Recently, FED members hinted that the bank won’t cut further in December and that together with obvious profit taking, keeps the dollar bid for the time being. The reasons and explanations for the dollar strength might be many and varied, but one thing is for sure: Dollar needs 1.46 taken out, in order to signal a proper reversal in the pair!

Let’s see what the data will show for the American economy and how the traders will react! It is interesting to note that in recent sessions, what Europe sells, New York comes in and buy back! So, don’t be surprised if euro gains from here and correct the losses until further retracement gets underway…