We are waiting for the US session for the Labor Report and the jobs figures as expectations are for an easing pace of layoffs, as the unemployment holds steady at its 26-year high of 10.2%. Majors are trading within very tight ranges amid heightened caution in financial markets awaiting the data that might set the direction for the end of this year's trading! Signs of stability are seen across economies, yet the unexpected contraction in the services sector in the US yesterday managed to drag indices into the red territory and Asia trailed them today, which powered greenback to the upside; yet today we can see that the dollar returned to stabilize amid its lowest levels this week against the euro and sterling yet around its highest versus the yen.
After the euro declined from its high levels yesterday, the dollar failed in holding strong gains; focusing on what Trichet said investors are starting to expect the ECB to be among the first from the G7 nations to start reversing their monetary easing after they started with gradual announced steps yesterday. The euro resumed the bullish wave versus greenback today rising from its lowest at 1.5036 to set the highest at 1.5090 and now is trading around 1.5064. The pair is trading above the critical support at 1.5035 and the consolidation might drive the pair higher to breach a very important resistance over short-term basis at 1.5135; we see that today's trading is very critical as any violent move might alter the direction and that depends on breaching any on the mentioned levels.
Sterling declined sharply against the dollar yesterday, yet the dollar failed in holding its grounds as cable resumed the bullish headings trading among the low set at 1.6519 and the high if 1.6639; positivity is seen for the pair despite the buying saturation over intraday basis as the pair trades above 1.66 areas. Shall the data manage to take sterling to settle above 1.6680 we might witness the start of a new sharp upside direction over the coming days, while trading below 1.6560 will cause a new strong bearish wave.
As fear continues to be seen in the market over the growing seriousness of Japanese authorities to intervene in the market, the Japanese yen continues to weaken. The yen continue to trade against its lowest levels set versus the dollar this week, the USDJPY inclined today from 87.97 towards 88.40 as investors are selling the yen in fear of a sudden intervention from the government that will strongly weaken the yen.