EUROPEAN session review: Dollar still rising

Data released: 

08:55 GMT Germany Unemployment Change (Jan) -28K -5 -15K 

08:55 GMT Germany Unemployment Rate s.a. (Jan) 6.8% 6.9% 6.8% 

09:30 GMT UK Net Lending to Individuals (MoM) (Dec) £2.3B £1.9B £1.5B 

09:30 GMT UK Consumer Credit (Dec) £0.6B £0.7B £0.7B 

09:30 GMT UK M4 Money Supply (MoM) (Dec) -1.4% 0.3% 0.1% 

09:30 GMT UK M4 Money Supply (YoY) (Dec) 2.7% _ 2.7% 

09:30 GMT UK Mortgage Approvals (Dec) 71.638K 73.000K 70.758K 

10:00 GMT EMU Consumer Confidence (Jan) -11.7 -11.7 -13.5 

10:00 GMT EMU Business Climate (Jan) 0.19 0.35 0.2 

10:00 GMT EMU Economic Sentiment Indicator (Jan) 100.9 101 100.4 

10:00 GMT EMU Industrial Confidence (Jan) -3.9 -2.8 -3.4 

The dollar rose against the euro for a fifth day after the Federal Reserve scaled back its stimulus program of bond purchases that tend to weaken the currency and before data that may underscore the strength of U.S. growth. 

The decision to slow asset purchases by a further USD10 billion/month was unanimous. In the statement the Fed acknowledged that economic activity had picked up in recent quarters although noted that labour market indicators were mixed but on balance showed further improvement. 

EURO 

Labor-market figures from Germany showed unemployment fell by 28,000 in January, better than the 5,000 expected. However the euro fell. 

EUR/USD slid to $1.3570. Initial support is at $1.3550 (trend line from Jul 7). Below losses may widen to to $1.3400 (Nov 21 lows). Above $1.3680 resistance comes at $1.3740. Above resistance comes at $1.3820 (Dec 30 highs). 

POUND 

The sterling came under selling pressure after poor data from the UK docket: M4 Money Supply contracted at a monthly pace of 1.4% in December, Mortgage Approvals missed estimates at 71.638K vs. 73.0K. 

GBP/USD remains under pressure. Initial support comes at $1.6440 (recent lows), below - at $1.6400. Initial resistance is near $1.6560 (session high). Strong resistance comes at $1.6660 (Friday’s high), extending to $1.6675/80 (channel line from Jan 10), then - at $1.6740/60. Minor support comes at $1.6470 (recent lows), below - near $1.6400. 

YEN 

The yen rises versus the dollar. 

USD/JPY rose to Y102.60. Initial support comes at recent lows on Y101.90/80. Below losses may extend to Y101.10 (Nov 26 lows). Above session high acts as resistance around Y103.60. 

DATA AHEAD: 

Japan National Consumer Price Index will be published at 23:30 GMT.

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