The dollar ended the afternoon mixed versus its major counterparts. The USD gained value versus the British Pound, the Euro, and the Swiss Franc, but was little changed versus the Canadian dollar, Aussie, and Kiwi, and fell against the yen. Most of the trading today appeared to be technically-oriented, and possibly influenced by investor hesitation about Friday's US jobs report, which casts most downside event risk squarely on the greenback.
The major data released today by the US government showed pending sales of previously-owned U.S. homes fell much more than expected in November. October saw a 3.9% increase in pending home sales, and the expectation was for a 2.3% drop in November. However the actual data revealed that pending home sales plunged by 16 percent in November. This caused more doubt regarding the view that the US housing market has stabilized.
As previously stated, December non-farm payrolls on Friday will be the major determinant of the dollar's near-term direction.
Eurodollar (Technical Analysis)
As expected (Please see yesterday's Evening Review), the EURUSD tested but was unable to stay above its 1.4450 resistance level. It then dropped towards the next key support level of 1.4360 and is currently testing this level. If the pair can sustain a break down through 1.4360, it should travel down to the next support level of 1.4275 and do some testing there. However, if it cannot sustain a break, it will probably rise back up to re-test 1.4450. The RSI reading is just below 50 (the median), which does not give us any further assistance in determining which path the Eurodollar will take.
Equities and Commodities
US equities were down marginally today, while the European markets were mixed. The French and German indexes were marginally down while the UK index picked up a few points. Asian markets were up marginally, with the exception of China, which rocketed up 3 percent. Crude oil added about 30 cents on rising demand due to continued cold weather in North America and Europe while gold shed about 2 dollars in choppy, technical trading.
Forex Trader Library Receive over 15 hours (8 CD's) of our best Forex trading education in one package! Containing the newest Advanced Forex CD, this education pack focuses on exactly what you need to know to become a successful Forex Trader.