US Labour holiday and market undecided with no fresh flows post- NFP data led Asian and European sessions having a quiet day.

EURUSD closing above 1.2855 resistance supported the bullish picture on the horizon over the weekend but market failed to push the price beyond 1.2920 level due to corporate supply after 1.2900 option barrier was taken out.

USDCHF / EURCHF heading south after the news suggesting that “German Banks May Need to Raise $135 Billion on Regulations” and let’s see if the news bad enough to take EURUSD lower as well..

1.2830-1.2925 would be a safe range (1.2875 spot ref.) while 1.2865 appears as a good intraday level to watch today.

USDJPY failing to take the resistance levels out and heading south after each rally makes us feel like a new “EURCHF” status.  A possible double bottom test on its way at 83.6s as market long in xxx-jpy  post NFP with decent stop orders located below the support.

Good Luck All.

Looking for one more rally, before turning bearish Euro…

After leaving the key interest rate at 1%,  ECB raised its  GDP growth forecast to 1.6% from 0.9% for 2010. ECB President Trichet said a double-dip recession is not in the cards  and risks to the inflation outlook are on the upside during his press conference after the policy meeting yesterday.

Trichet delivering an optimistic assessment of Eurozone economies will be extra ammo against any squeezes for EURUSD bulls before NFP payroll numbers today.

Good sovereign interest for Euros between 1.2735-1.2775 area keeps the pair well bid last 48 hours and market players are keen to buys the dips to take the advantage of deflation fears in US bringing another wave of QE  and causing greenback suffering ultimately.

Daily oscillators points the rising momentum for a possible rally and a break of 1.2855 level opens the window of opportunity to test 1.3090 resistance after a knee jerk print of 1.2990.

On the other hand, a failure of topside break suggests a quick squeeze down to 1.2720.

The bullish reversal on risk sentiment in Asian session due to Aussie and Chinese data continued to dominate the rest of the day after better than expected US Manufacturing data.

Good sovereign demand appearing below 1.2725 in early London session helped market to trigger stops above 1.2750 and Euro being bought for EURCHF and EURJPY as a wash currency on a risk on theme accelerated the pace of the rally up to 1.2856.

I reckon market players ignoring the first negative print of ADP in 2010 may end up taking profit in long risk positions or use these levels to re-enter short risk positions before tomorrow’s NFP.

1.2785-1.2865 range is possible to dominate the Asian session before we see any clear sign on USD theme.

Good Luck All.

S&P nearing sell levels, decent correction.

Euro and DXY similar story, look for a dip in the dollar to get long.