Euro/US Dollar Find A Strong Bid In The 1.4260/80 Area

The dollar took quite a hit at the first trading session of the new year.

EUR/USD did find a strong bid in the 1.4260/80 area and the pair staged quite an impressive performance further out in the session. We consider the move mainly as a technical correction on the USD-strength at the end of last year.

Some cautious/ soft comments from the Fed (Bernanke/Kohn) on the US economy during the weekend might have played a role, too.

The data didn’t provide much of an explanation for yesterday’s move. The final EMU PMI came out in line with expectations (and was after all far from spectacular at 51.6) while the US ISM for the manufacturing came out on the stronger side expectations and at a very lofty 55.9.

With respect to the latter, we thought that markets had reached the stage where US positive economic data might be considered as USD-supportive.

However, this was not really the case yesterday. To be honest, the EUR/USD reaction (and the reaction of the currency markets in general) to this ISM release was (again) very subdued.

The pair came temporary off from highs at around 1.4450 and settled in the lower 1.44 area. Looking at the price action in EUR/USD, one could argue that markets were again/still playing the risk theme at the start of the new year.

FX Currency Trading Explained For Newbies

Foreign exchange currency trading is one of the most lucrative businesses you can get into these days. When the worries of financial turmoil loom just around the corner, it is good to have an extra source of income you can turn to.

FX currency trading is one of the fall backs you can count on if you have the right knowledge to back you up. Just as it is with any other business, forex trading success comes from hard work and the patience to learn and familiarize yourself with its ins and outs.

Forex currency trading is lucrative but it is also tricky especially for beginners. You have to be aware of its processes and gather enough information to help you come up with your own trading system. The currency trading game is a fast paced one and you always have to be flexible enough to keep up with the demands and the shifting preferences of buyers and sellers.

Forex Currency Trading's Basics

Before anything else, you might as just want to ask - what is this Foreign exchange currency trading thing anyway?

This business works through a buy and sell process of various currencies. Players operating in this business game rely on exchange rates to know if it's a good or bad time to sell their specific currencies.

As you know, monetary currencies differ from each other in terms of amount but all of them are interconnected with each other.

Commodity Prices Continued Their Good Performances

Commodity prices continued their Great performances overnight, helping commodity producer stocks lead most Asian indices higher.

Gold is on the highs around $1128, representing a gain of 2.8% in 2010 already, and crude oil remains elevated just below $82 a barrel.

Sentiment has been buoyed by comments from the IMF’s John Lipsky that the organization would be revising higher its forecasts for global economic growth from 3.1%, and concurrently, the Baltic Dry Index, which we have long used as an indicator for global demand, rose for the first time in over a month yesterday – jumping around 4.5%.

The reaction in Forex markets has been one of widespread USD-selling; with Euro/US Dollar back above the 1.4460 technical level, and USDJPY now trading down at 91.75.

The 14-day RSI on the dollar index (DXY) has now pared all the way back from its overbought levels on 22 Dec at 72.1 (where levels above 70 are considered overbought) down to neutral current levels of 52.5.