• EUR/USD +0.8%
• GBP/USD +0.9%
• USD/CHF -1%

EUR/USD

All Go For The Euro: Euro consolidation broke as traders bid the single currency higher against its greenback counterpart on positive economic data this morning.  Countering the dour data that was released for the worldââ,¬â"¢s largest economy, confidence in the European region rose to a five year high.  Consumer prices also climbed in the month of January lending to further tightening bias as energy prices contributed to overall inflationary pressures.  However, the current momentum may be unsustainable as energy prices have pulled back recently, lending to a weaker future report which may add weakness to the regional currency.  Nonetheless, a push higher looks probable as we head in to the Asian session with traders focusing on manufacturing data out tomorrow morning.  Expected to rise another notch, activity looks to have peaked slightly higher as global foreign demand continues to underpin the expansion.  Also released will be unemployment data with U.S. economic data sure to weigh heavily on tomorrowââ,¬â"¢s session.

Rumorville: Bidding begins at 1.1890 on any retraces as demand remains strong from the dayââ,¬â"¢s move.  Offers are comparatively residing at the top with stops above at 1.1935/40.  Heavier considerations are at 1.1970 with corresponding stops above at 1.1980.

GBP/USD

Confidence Rises, Sparks Advance: Lending to pound strength looked to be improved consumer confidence as traders continued the theme of greenback negativity during the session.  Falling less than expected, the recent GfK report suggests that consumers are relatively optimistic heading into the new year even though sales continue to remain thin.  Posting a negative 4 reading, the current print is an improvement from the consensus decline of 5 expected.  With this morningââ,¬â"¢s release, it seems less likely that central bankers will opt for a rate cut as higher consumer confidence is likely to spill over into a rebound in consumption.  Looking ahead, market sentiment will turn to tomorrowââ,¬â"¢s manufacturing data.  Anticipated to rise again for consecutive months, the better than expected report should help to continue the current advancement.

Rumorville: Bids are seen at 1.7500 and 1.7460 on retraces with comparative selling pressure at the 1.7550/55, where trading is currently taking place.  Further selling resides above at 1.7570/75 with corresponding stops at 1.7580 restricting near term peaks above as we head into the Asian session.

USD/CHF

Dollar Data Dour For The Day: Dollar data was to the downside, providing the majors plenty of ammo to shoot previous gains down.  With gross domestic product rising just 1.6 percent, concerns are now abound that the regionââ,¬â"¢s productivity may not be as expansive as some were led to believe.  Countering previously dollar bullish data, manufacturing additionally declined in the Chicago and Richmond areas.  Coupled with pessimistic housing data, the reports sparked ideas of a potential screeching halt to the current tightening bias lending to plenty of dollar bearishness.  Should interest rates increases stop, expectations are for a return to the widening deficit in leading the dollar to its doom.  As a result, bulls are looking ahead to another full slate of data in countering todayââ,¬â"¢s move.  Of note will the PCE Core and manufacturing data.  A notable gauge of inflationary pressures, PCE is expected to continue its ascent prompting further rate hikes.  However, should manufacturing dip in line with todayââ,¬â"¢s reports, dollar bulls could be in for a fight at daybreak.

Rumorville: Offers continue to reside at 1.3180 and further up at 1.3240 as bidding looks to emerge around current valuations.  Stops below are noted at 1.3020 should current support not hold.

Richard Lee is a Currency Strategist at FXCM.