The dollar is likely to remain volatile today ahead of US Prelim GDP data tonight and Fed Chairman Bernanke's speech on economy outlook. The Yen rally in Asia was capped below Y85 and the rest of the day saw light selling back to lower Y84 region. Meanwhile, Euro broke through resistance at 1.2730 on solid weekly jobless claims but failed to hold above the figure. Elsewhere, The Sterling broke back above the key 1.5500 level and was able to test 1.5600 on solid EUR/GBP selling and improvement in UK Retail Sale Outlook. August CBI Distributive Trades survey showed a rise to 35 vs. 20 forecast and 33 previously.
EURO: The Euro (1.2712),corrected towards 1.2764 (as expected) however maintains the overall downtrend. Immediate resistance still is maintained near 1.2760 - 1.28 levels while the support continues to be near 1.26 levels. Additional weakness is likely in the pair as we see the dollar raising higher on the back of better than expected intial jobless claim numbers. Medium term tone: Neutral to slight bearish .
GBP: The Pound (1.5525) took the support of 1.5506 levels yesterday from where it rose to 1.5597 levels barely moved 100 pips during the session. It showed second day of its recovery keeping the initial support of 1.5470 intact. Below which the bearish pressure can lead the pair towards 1.5370. Selling around current levels with tight stoploss in place is recommended. Risk continues to be on the downside for the pair. Medium term tone: Neutral to bearish .
JPY: Usd/Jpy (84.50) moved in a small range yesterday rallying to 84.88 yesterday and remains bearish overall. Strong resistance is seen at 85.20 at the moment. The trend remains bearish. Support is seen near 82.85 levels(last low). Outlook for Yen: Bearish towards 87-88 levels in Medium term.
AUD: The Aussie (0.8859) showed correction till 0.8918 levels from where it was supported at the 55 daily EMA at 0.8847 levels. Support continues to be at 0.8770 on the Weekly charts. It is quite possible that the market may be quiet today ahead of the US GDP data release in the evening, which is expected to come in weaker than last time.Bias: Overall weak.
GOLD: Gold($1236) plunged from the highs of $1244 levels yesterday down towards $1233 levels as the dollar rose after the better than expected data yesterday. If the momemtum in the market contiues to be stronger then the next target in gold would be $1262 levels(high of 27 June) Medium Term remains- Bullish
Dollar Index: Dollar Index is currently trading at 82.92 levels. Immediate resistance comes at 83.45 level and strong support comes at 80 levels. Bias remains bullish for dollar above 80 levels.