Another week has started with dollar clearly strong ahead of the last full trading week of this year.

After a very busy Friday, with EUR/USD breaking all important support levels, first at 1.4550 and then 1.4450, the pair made a monthly low at 1.4410. However the opening of the markets on Sunday evening, found more sellers in the pair, which resulted to the break of important 1.44.

Today started again with dollar strength, as euro remained on the defensive, however euro bulls were ready to start bidding the European currency form 1.4435 all the way up to 1.44 where it is at the moment of writing.

Today’s data out of the US were mixed, with current account slightly better but empire manufacturing printing a very low number. When time for the TICS data came, the number for last month was very high, which made investors think that the foreign demand for dollars made a comeback, after two continuing months of negative numbers.

EUR/USD is still on a selling mode despite euro correcting some of its losses, but since the pair was trading out of bounds and it was heavily oversold, that move was only natural.

This week we have plenty of economic data to keep us going, with the housing data being very important indicators to watch and also GDP out of the US.

Also it will be interesting to watch how the economic data will come out of but Euro zone and England, since we have the German IFO later on this week and UK inflation numbers along with BOE minutes.

GBP/USD was under pressure for one more day, as the House prices data earlier printed once again a very negative number. This makes traders think twice about buying the pound and next level to watch will be 2.0080. Shorts can be tried in any pull backs on the pair with target the latter level. A clear break of 2.0080 opens the path to the first important psychological 2.0 level.

EUR/USD found good support at 1.4335 for now and we can still try shorts in the pair near 1.45 for continuance of the recent downward move.

Later on today we have NAHB housing index out of the US, and it will be interesting to watch the number as the last few months was very bad. The fact that some of the recent economic data were better than expected, gave speculators the notion that the American economy is moving away from recession and FED will be forced to leave rates unchanged and not move to further easing as initially was perceived. This is the reason as well for dollars recent rally; however beware because the fact that few indicators came unexpectedly good doesn’t mean that the economy is fully restored. The sub prime mortgage fears are still alive and the housing sector is still suffering. This week we shall see after the housing numbers how big is the damage.

The fact that we are moving closer and closer to Christmas holidays might give the excuse for big moves as traders are closing their yearly books and will want to close their positions. Also, closer to the 25th we might see choppy trading as the liquidity will be thin and only a few players will be active which it will make the market quite unpredictable.

So, our advice will be after this Friday to enjoy the turkey and all the festivities and remain out of the market unless there are clear signals…