Slow Forex Night as Holiday Markets Thin

The EURUSD has traded mainly sideways during the night posting 1.4250 presently(see hourly chart). With the Tokyo market closed, the dollar has remained well-bid amidst a background of very thin trading. Analysts are pointing out that a EURUSD break of $1.4194 could lead to further weakness with targets of 1.4044 and 1.4000 possible.

The USDYEN is currently re-visiting highs of 91.85 as the dollar continues to benefit from an increased optimism concerning US economic growth as well as yesterday’s strong housing data release. However, further Dollar progress may be hindered by strong Japanese exporter offers existing at the 92.00 level.

Earlier this morning, the Bank of England unanimously held their bond purchase plan at 200 billion pounds. In addition, UK mortgage approvals were posted with a rise to 44713 against expectations of 43000. However, the GBPUSD has fallen further overnight trading well below 1.6000 at its current value of 1.5945.

There are a number of major event risks today. At 8.30am EST, US personal spending will be released with expectations of an 0.7% increase. Later at 10.00am EST, both the US new home sales will be published, forecasted at 438K, together with the important University of Michigan Confidence Index which is expected to show a reading of 74.