The NY session saw the US dollar come back better bid despite a disastrous housing number. Pending home sales in the US collapsed -16% in November while the market was anticipating a more modest -2% decline. This initially saw the buck come back better offered (sold) and Euro would rally into the 1.4430 area on the follow. The rest of the session looks to have been driven by market positioning. EUR/USD collapsed as the 1.4390 break saw momentum selling emerge, taking the pair to the session lows just below the 1.4350 zone. There was talk of supranational interest down in that area and this looks to have contained the weakness for now. Cable witnessed some similar price action and the drop below 1.6000 here was the trigger for weakness into the 1.5964 session lows. Look for resistance now near the 1.60 area.

For the second day in a row, the NY session dealt a blow to the commodity currency rally. USD/CAD got as low as 1.0335 before reversing back towards the 1.0400 zone. Aussie, meanwhile, put in its high near 0.9170/75 before falling back down to earth to trade around the 0.9100 level. Much of the shift came on the heels of the selloff in gold. XAU/USD found good resistance ahead of the $1130 area and came off hard in the latter part of the session to trade near $1115 as we write. If the price action to kick off the year is any indication, though, we expect a good amount of buying interest to rear its head on a approach of $1100.