As we approach New York closing, markets are still in a euphoric mood, with DOW JONES up and S&P 500 so far its biggest monthly rally for many years! The markets are clearly in a more positive mood these days, and news today that economic growth was at its lowest did not seem to make any difference!

The EUR/USD did not manage to break higher than important 1.3630 resistance today and at the time of writing the pair is trying to test 1.3520 good support for now. A clear break of the latter level may open the way for further losses towards 1.3460. The dollar seems stronger today across the board and that shows how fragile things are still in the economic outlook in Euro zone and UK. Investors are not totally convinced yet about the euro€™s upside, however there are a few days left for the month end and therefore what we witness today may be simply profit taking before another leg upwards towards 1.38 or even 1.40

Today the economic calendar had a few important releases from UK, with retail sales coming out worse than expected, giving the pound a reason to fall once again! The economic situation is still unclear and BOE has a tough job to do these days, what with its rates close to zero and inflation coming out higher! Also today we had jobless claims, with another record high number of 652.000 and a prospect that payroll data may reach a new low in the coining days! Investors are clearly ignoring the bad data these days, as their new found confidence in Obama€™s and Geithner's plans seem to be holding for now, however the coming days will confirm if the current rally has an expiration date!

There are many issues that traders are monitoring at the moment, and the fact that next week we have the much awaited G20 in London, where many global issues will be discussed, makes investors even more wary about the economic future. The recent call by China to change the dollar as the only currency reserve, was met by objections from US government, however it was confirmed today that the issue will be discussed in next week€™s meeting.

Traders will monitor every word being said by G20 officials and therefore the markets may be choppy until the meeting commences. Let€™s not forget that in the coming weeks we have the payroll data out of US which could potentially give us another negative number and it will be crucial for the market€™s direction to see how traders react in the aftermath of the events!

The euro still has potential to continue its recent rally against the dollar judging by the daily and weekly charts, as long as 1.33 remains untouched for now. The question is if the current euro correction is just a simple correction before another upside move occurs or if the dollar will come back to haunt the euro due to risk aversion€¦