Previous session overview
The EURUSD started the year at the December closing rate of 1.4050 from where it headed south to the days low of 1.3841 before European traders walked in, since then the pair has retraced back to 1.3950. The British Pound had a very similar move starting the day at the top above 1.4760 before it fell more than 200 pips to the day's low of 1.4504. It stands at 1.4600 at present.
The Japanese currency also had a fairly active Asian session, starting the year near the lows of 90.68 only to rise up to 91.31 and the USDCHF opened at 1.0630 and rose to peak at 1.0774. Liquidity has been fairly thin explaining the large currency fluctuations this morning.
Market expectation
Many traders will stay away today and liquidity is thought return to normal levels on Monday the 5th of January only. This means that markets may make large and awkward movements before closing for the weekend. In EURUSD there is a bearish resistance at 1.3975, if it can pierce the trend-line it may rise all the way to the strong resistance near 1.41. Strong support lies at the day's low of 1.3840, closing the week lower risks further weakness towards 1.35 next week.
The Pound should continue to hold a wide range between 1.43 and 1.47 and its movements are likely to be driven by developments of the EURGBP Cross. Down as low as 0.9445 from 0.9820 on Wednesday, the psychological 1.00 barrier has not yet been tested.
In USDJPY initial resistance at 91.30 ahead of the strong bearish trend at 91.65 should top the markets. Support lies at 91.00 and again at 90.55. USDCHF has a strong initial support at the present 1.0620 level, a break risks to see it fall towards 1.0535, resistance at 1.0660 and 1.0725.
No major economic data release is scheduled for today.
Most important events of the day
| Date | Time:GMT | Currency | Indicator | Forecast | Prior |
| 1/2/2009 | 5:30 | AUD | Commodity Prices y/y | 35.00% | |
| 1/2/2009 | 9:00 | EUR | Final Manufacturing PMI | 34.5 | 34.5 |
| 1/2/2009 | 9:30 | GBP | Mortgage Approvals | 33K | 32K |
| 1/2/2009 | 9:30 | GBP | Net Lending to Individuals m/m | 1.1B | 1.3B |
| 1/2/2009 | 9:30 | GBP | BOE Credit Conditions Survey | ||
| 1/2/2009 | 9:30 | GBP | Manufacturing PMI | 33.5 | 34.4 |
| 1/2/2009 | 10:00 | GBP | Halifax HPI m/m | -1.60% | -2.60% |
| 1/2/2009 | 15:00 | USD | ISM Manufacturing Prices | 20.5 | 25.5 |
| 1/2/2009 | 15:00 | USD | ISM Manufacturing PMI | 35.5 | 36.2 |
