The EURUSD broke above 1.42-level on strong stock market gains and overall better US corporate earnings.
- Also, yesterday's report of a rescue plan for CIT Group boosted optimism, weighing on the US dollar, hitting a six-week low against the euro at 1.4249.Â US leading indicator came in better than expected, but this failed to push the euro any higher against the dollar.Â The pair's high so far for 2009 is at 1.4337 that was touched in early June.
- Investors are awaiting Federal Reserve Chairman Ben Bernanke's address to Congress today.Â The Chairman's report will layout the Fed's plans for the next six month and is expected to suggest that the economy is moving into positive territory.
- Bernanke's said that rate hikes is likely prior to an asset purchase reversal in the Wall Street Journal.Â His comments have pressured both the sterling and the euro as they are trading slightly lower than yesterday's highs.Â In his report today, Bernanke would have to find the right balance between US growth expectations and inflation concerns.
- If the markets are in a recovery mode, the focus now will turn to the speed of the global economic recovery.Â In the last FOMC Minutes released last week, the Fed announced that the economy is still 'weak' and 'vulnerable' to adverse shock.
Currency to watch out for: EURUSD & GBPUSD
- The EURUSD pivot point is at 1.4160 with a preference to enter into long positions at 1.4170
- The GBPUSD pivot point is at 1.6450 with a preference to enter into long positions at 1.6460
Today's calendar and market movers:
- UK Public Sector Net Borrowing expected to fall to 15.7 billion
- Bank of Canada Overnight Rate expected to remain unchanged at 0.25%
- US Fed Chairman Bernanke is due to testify on the semi-annual monetary policy report, in Washington DC.
- US stocks jumped on Monday, taking the S&P 500 1.1% up to an eight-month closing high.Â The Dow and NASDAQ closed higher by 1.2%.
- As of 06:20 GMT the Nikkei is at 2.6% and the Hang Seng at 0.2%