Over the weekend, a 300 billion tax cut was announced that would cut taxes to working class families, possibly through reducing payroll taxes. The reaction to this has defiantly supported the US Dollar. The only major not affected so far this morning is the GBP. This move may be the resumption of USD strength oft called for in the last few weeks. The big player in the market right now is the Obama administration. As more details come out about plans he has for the first year, the market will react to each one. As for now, the Stock market is concerned about corporate profits, and the Forex Market is supporting a recovering Dollar.

EUR/USD:  Drops more than 300 points over night
GBP/USD: Holds in overnight range
USD/JPY:  Drive to 94.00 falls short
USD/CHF:  1.1136 holds on the top side

EUR/USD
Since the NY cut, Forex Markets have settled with volatility dropping off a bit. Over night the pair fell from a high of 1.3944 and fell to a low of 1.3553. Now that the 1.3733 line (blue arrow) has broken, the USD is free to take back some ground. 1.3425 is a good roll over point, and may attract attention in the coming days. Currently prices are settling above 1.3625. An hourly descending wedge was broken to the down side signaling a continuation of the recent weakness in the pair.



GBP/USD
The current range being created by the pair is holding strong. Currently prices are testing the top of this range around 1.4570. With a close above 1.4549 the DE holds solid and a new test to bottom could resume. The Bottom side has held very strong over the last few days, last tested seriously on 01/02/08. The 1.4375 area represents the bottom, with 1.4844 and 1.5187 areas on the top side. A break above the daily pivot point brings the tops side into focus over the next few days, even today.

USD/JPY
After several days of solid boredom in the pair, a break finally happens over night. The pair went as high as 93.58 but has since fallen below 93.00. Currently prices are finding their way back over 93.00 and will try to make the 93.50 area again before the day is out. The Dollar is strong against the Yen right now as the DJIA recovers from daily lows, now just 44.20 down on the day. 93.50 is resistance while 92.85 supports.

USD/CHF
After a fall from daily highs just above 1.1100 to 1.1000 the pair had retaken a stance for the top. Price is currently at 1.1052 and looking like it wants another shot at the high. The Dollar strength comes on the back of the stimulus plans based on tax cuts for the working class. This makes the gains tenuous at best. Should anything interfeer with currency market sentiment, a fall could happen just as quickly. The main resistance comes in at 1.1136 daily high from 12/19/08. Initial support is seen at 1.1000, with 1.0850 way below.

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