FXstreet.com (Barcelona) - According to Sean Callow, a Global FX Strategist at Westpac, “The USD is still struggling to build a compelling multi-week case for a sustained upside movement as a slowdown in the Fed’s $85B p/m asset purchase program would be one key trigger, however the US labor market is unlikely to generate a string of 200k+ monthly jobs prints amid building fiscal headwinds for the foreseeable future.”

That being said, peripheral EZ equities are trading on the back foot amid Berlusconi’s rise in the Italian polls and the slush fund scandal enveloping Spanish PM Rajoy. “The USD index may enjoy a short-term reprieve towards 80.5-81.0, though we prefer to open a short USD position at these levels looking for a test of 78.0.” Callow suggests.