The greenback did not see a fluent direction in the market on the back of better than expected US economic data.

The US trading session was filled with strong economic reports that saw US unemployment claims fall to 415K from 457K for the previous week. Economists had expected 420K new jobless claims. ISM Non-Manufacturing PMI was significantly stronger, up to 59.4 after an expected 57.4 mark. Any reading above the 50.0 level represents growth in the economy. US factory orders also unexpectedly rose by 0.2% on expectations of a 0.2% decline.

Strong economic data combined with the ECB interest rate decision had the USD mixed versus the majors. Versus the euro the dollar saw its strongest gains of the new year. The EUR/USD closed the day down at 1.3625 from 1.3794. The GBP/USD finished the day lower but not before the pair pushed near a three month high at 1.6277 and the pair ended at 1.6140 from 1.6184. The AUD/USD was trading firmer at 1.0170 from 1.0103.

The market's attention will now shift to the all-important US Non-Farm Payrolls report which is due out today at 13:30. Economists forecast the US economy added 138K new jobs in the month of January but the unemployment rate is expected to rise from 9.5% from 9.4%. Strong employment data from the US may have significant ramifications on the dollar and the Feds outlook on the economy. Should better than expected non-farm data show an improving employment scenario, the Fed may begin to pull back on their loose monetary policy which would be a positive for the dollar.

Initial support for the EUR/USD comes in at 1.3570, followed by 1.3500. Resistance is located at this week's high of 1.3860.