The US dollar is mixed versus the majors and continues to be traded inside previous defined price ranges. Momentum in favor of the dollar is waning and could be derailed after this afternoon's US economic data releases.
This morning's dollar strength on the back of yesterday's Fed meeting minutes faded after traders once again found the euro attractive given the disparities between US and European monetary policy. Highlights from the Fed's previous policy meeting show the Fed's plan for exiting the ultra-loose monetary policy but failed to provide traders a timeline as to when the tightening will begin. The EUR/USD found bids at the 1.4200 level but remains capped at 1.4300. Dollar bulls will need to make a stand between the 1.4300-1.4350 levels to keep the momentum in favor of the greenback.
Sterling was trading higher after better than expected UK retail sales . However, traders may not want to look too deep into the data as the strong consumer numbers may have been driven by one off events such as the Royal Wedding and the Easter holiday. Markets have also been flooded with bearish sentiment for sterling with the changing of the guard at the BoE MPC. Cable has support near 1.6100 and 1.6050 near the rising trend line off of the May 2010 low. Resistance comes in at this week's high at 1.6300.
The USD/JPY is pushing the 82.00 level on the back of weaker than expected GDP numbers. The data shows the Japanese economy was likely headed for a recession prior to the earthquake and tsunami. USD/JPY will likely target retracement levels from the April to May move at 82.50 followed by 83.25.
US housing, manufacturing, and unemployment data are due to be released shortly. Strong US economic data should feed into dollar selling but today's tight trading ranges may hold the majors within the recent price action.
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