The major move this morning came from the EURUSD, as it failed to hold above its previous lows. When 1.4250 was breached, it quickly dropped to lows of 1.4187 this morning, as selling action triggered major sell stops in the pair. Currently, the pair is trading around 1.4200, but appears to have very little support. This has been apparent as during its fall, there was no support at its December lows of 1.4215. The current trading patterns convey that Forex traders aren't willing to wait around for a turnaround for the euro, and have a sell first analyze later mentality.

Yesterday's weaker than expected German ZEW numbers also indicate that sentiment is worsening within the Eurozone itself. This doesn't bode well for the euro, as it could be forbearing that Eurozone based investors will be moving a portion of their assets out of Euro denominated holdings. Looking ahead, for the EURUSD to trade higher, Forex traders will need to see changes relating to Eurozone debt problems begin to see fruition.

EURUSD Support/Resistance 1.4185/1.4250



UK CPI was better than expected yesterday, which caused the GBPUSD to trade to highs of 1.6457. Nonetheless, the move higher was met with selling, as Forex traders took profits after an impressive move higher in the pound prior to CPI release. Looking away from the GBPUSD, the EURGBP appears to be involved in an extended breakdown, as pound outperformance continues. Last week, the EURGBP traded below its 0.8840 support, and has since had no problem continuing it move lower. As the chart below indicates, the pair has traded back down to its September 2009 lows, and if 0.8700 doesn't hold, we could see a return to 0.8550.

Looking ahead, Forex traders will be watching the MPC Minutes and UK Claimant Changes which are released today. With both employment and BoE news on the horizon, trading in pound crosses is expected to be quite volatile today.

GBPUSD Support/Resistance 1.6300/1.6455


Looking Ahead Today

Later in the day, Forex traders will be watching US PPI and Building Permits numbers which are released today, along with New Zealand Retail Sales numbers. Also, corporate earnings continue to be released in the US. So far, earnings numbers have been mixed, but that hasn't stopped stocks from trading higher.