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US Dollar Holding Near Highs

DXY, EUR/USD, GBP/USD, USD/CHF, EUR/CHF, USD/JPY, AUD/USD, USD/CAD

10-Yr: +07/32..1.852%.. USD/JPY: 87.73.. EUR/USD: 1.3060

The US Dollar Index is standing near session highs at 80.55. Trade has held in a tight 20 cent range over the course of US trade, and remains on track to close at a 1.5 month high.

EUR/USD is -25 pips at 1.3055 ahead of tomorrow’s European Central Bank meeting. Participants are expecting the central bank to hold its Key rate at 0.75%. Traders will be focused on near-term support in the 1.3050 region, but a breakdown will quickly shift focus to the 1.2900 mark. Data due out Thursday is limited to French industrial production.

GBP/USD is -35 pips at 1.6020 as trade slides onto support in the 1.6000 area. Traders will be watching that level closely as the Bank of England holds its January policy meeting Thursday. Expectations are calling for both its benchmark interest rate and asset purchase program to remain at their respective 0.50% and GBP 375-B. Traders will be eying the 1.6000 level careful as a breakdown will make for a test of 1.5850/1.5900.

USD/CHF is +15 pips at .9255 as trade holds near a 1-month high. Recent action has been pressing resistance in the vicinity with the pair looking for its first close above the 50-Day MA in almost two months.

USD/JPY is +70 pips at 87.75 as pullbacks continue to be bought. The bid came after reports indicated the Bank of Japan plans to adopt a 2% inflation target, and expand its asset purchase program to a rumored more than JPY 200-T, currently JPY 100-T. Wednesday’s close will likely occur just below a 29-month high.
AUD/USD is +10 pips at 1.0510 amid a relatively quiet trade. Action has been able to push through the 1.0500 area that has proved difficult over the past week, but now must contend with 1.0525 resistance. Australia’s building approvals will cross tonight.

USD/CAD is +5 pips at .9870 after this morning’s Canadian housing starts posted an in-line 198-K. Recent action has been book ended by .9840 support and .9880 resistance aided by the 100-Day MA. Canadian data includes the New Home Price Index and building permits.