The dollar rebounded yesterday as markets were directionless and choppy yesterday. Looking ahead, ADP Employment numbers are released later today. Reaction to this number could be a barometer of where the dollar moves over the next several weeks. The dollar ended 2009 rallying on hopes that the US FED will raise rates sooner than expected. However, the rally has fizzled as traders have dumped dollars for riskier holdings. As a result, Gold, Crude Oil, and the Commodity currencies have rebounded. Therefore, Forex participants will be watching to see if the dollar will again act well on good US economic data, or will it continue the 2009 direction of primarily rallying as a safe haven.
EUR & GBP
Both the EURUSD and GBPUSD have traded lower in the last 24, but the moves could be of little consequence as on Thursday, both the BoE and ECB have their monthly policy meetings. Therefore, trading will probably continue to be volatile as Forex traders make their bets before the key meetings. Sentiment for both currencies has fallen, as both the UK and Eurozone are battling against high debt levels that are causing splits within the central banks of what is the best course of action for the future.
EURUSD Support/Resistance 1.4325/1.4450
GBPUSD Support/Resistance 1.5925/1.6150
Earlier this morning, Australian Building Approvals were released, and were better than expected. The numbers caused the AUDUSD to rise, and continues the momentum in the pair which has benefitted from higher Gold prices and a move by Forex trader into riskier currencies. The pair has currently traded towards its downtrend line (see chart). Therefore, if it can surpass this area, it could make a move higher towards its 2009 highs.
AUDUSD Support/Resistance 0.9090/0.9200
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