The US dollar sold off modestly today on stronger European economic data and weaker US data. The dollar’s weakness was seen against every major currency except for the Canadian dollar which followed oil prices lower. Trading remains extremely quiet in the foreign exchange market and any moves that we have seen thus far are still nominal. The only currency pair that is really moving is the EUR/USD, but thin liquidity could be exacerbating the pair’s trading ranges.

EUR/USD’s fall from 1.4360 was supported by 4 hours 55 EMA and recovers. Though upside is still limtied below 1.4360 minor resistance. As discussed before, bBreak of the inner rising channel support is taken as a first signal that rise from 1.2423 has completed. Intraday bias remains on the downside…

US consumer confidence unexpectedly drops to a record low in December, due to mounting job cuts.

With no US economic data on the calendar today, the dollar weakened against every major currency except for the British pound. Trading continues to be very thin with commodities being the only products that are really moving. The tensions in the Middle East have driven oil and gold prices higher. US stocks also gave back Friday’s gains and remained contained within its week long trading range.

AUD/USD’s recovery from 0.6760 continues in early US session. With an intraday low in place, further upside might still be seen. Though, overall short term outlook remains unchanged. As discussed before, price actions from 0.6008 are treated as consolidation in the larger down trend with rise from 0.6075 as the…

The pound hits a new record low against the euro due to continued concerns about the outlook for the UK economy.

Guinea’s coup leader says contracts for the vital mining industry will be reviewed as he vows to curb corruption.

Industrial output in Japan fell more than 8% in November, the biggest drop on record, government figures show.

It has been an exceptionally active year in the foreign exchange market as currency volatilities hit record highs. In the first half of the year, everyone was worried about how much further the dollar would fall but in the second half of the year the concern became how much further the dollar would rise. More specifically, after hitting a record low against the Euro in the second quarter, the US dollar surged to a 2 year high against the currency in the beginning of the fourth quarter. From trough to peak, the dollar index rose more than 23 percent in 2008.

No change in EUR/USD’s outlook. Fall from 1.4719 is expected to extend further to 4 hours 55 EMA (now at 1.3814) and below. Further break of 1.3629 cluster support will turn short term outlook bearish for decline towards 1.2329 low. However, above 1.4306 minor resistance will indicate that fall from…