The Tuesday U.S. session has left as many questions as answers in regard to the next leg of Usd strength or weakness. “The dollar index is at major resistance at 87.00, and will need negative equity markets that lead to a move to bonds and Treasury notes for that area to break” Trade Team said. “Earnings reports are trying hard to allow equities to drop by revealing a benign set of forward guidance and profit numbers, and that has allowed speculative interest to build in a short oil market, and by default then, allowed the dollar to hold the ground stolen on the Sunday/Monday Asian session”.

“There is not a lot of difference between today and Monday fundamentally, just today the market is not prepared to sell the majors through such heavy daily chart support areas. The sideways crawl on the majors has held since the close of European trade on Monday, and in that 24 hour period has offered no signal at all as to whether momentum will continue the move started this week, or if it was a knee-jerk reaction that was allowed to gain momentum in a very thin market liquidity environment” TheLFB said.

The Bank of Canada threw in a surprise 25 basis point rate cut, but even that was not enough to break the consolidation phase; what a difference a day makes, and what a difference an increase in volume makes to the markets being able to freely move. The next hurdle will be in the Treasury Secretary speech at 10:00 EDT, and after that markets witness the 11:00 EDT European close. But if the market could not move off the fundamentals in the last 24 hours, it is hard to see what will easily move it, and hold it, ahead of the 14:30 EDT NYMEX market close.