The dollar ended the day lower yesterday as Forex traders started the new year with optimism and sold the safe haven greenback lower. Nonetheless, this week will be a key week for the dollar as crucial jobs data will be re released starting on Wednesday. Today, Pending Homes sales numbers are released, of late, US housing numbers have been better than expected. Look for a possible additional stock market rallies if the Pending Homes Sales numbers beat. If so, this could lead to further dollar weakness.
The euro rebounded yesterday, as rising equity prices led Forex traders to increase their riskier bets. This morning, the EURUSD has been able to hold onto its gains, but has been range bound between the 1.4400 and 1.4440 marks. The EURUSD's resilience is meaningful as its strength contrasts to the GBPUSD, which had also risen yesterday but has since faded.
EURUSD Support/Resistance 1.4400/1.4455
The pound surged higher following better than expected Manufacturing data yesterday, and appeared to be able to regain its momentum from late last week. However, the rally faded, even as the dollar was dropping against other major currencies. At Go Forex, we believe that the pound may still be susceptible to further losses, especially if equity markets reverse today's moves and trade lower.
GBPUSD Support/Resistance 1.6050/1.6240
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