EUR/USD:1.3120/22: The slight uptick we had expected did not come yesterday. Therefore, we sold on a break below the last low at 1.3115. The profit was taken at 1.3082 levels. Now sell close to 1.3125 region for a 45-50 pip downmove and if done keep a 50 pip stop.

GBP/USD:1.9560/63: Yesterday, we didnt wait for a spike to 1.9550-60, but sold the GBP at 1.9525 and the profit for the same was taken close to 1.9470 region. Today sell for 50% of equity here, with a 40 pip stop for a 50-60 pip pip dip.

USD/CHF:1.2390/95: Nothing was done, yesterday, as the dip to the 1.2345-55, region was not seen. Today we may want to buy the Dollar close to 1.2375 for 50% of equity and if done, keep a 40 pip stop for a 50-60 pip upmove.

USD/JPY121.52/54: Yesterday, we bought Dollar for 50% 0f equity as the dip to the 120.85-90, region was seen. Continue the same for a target of 121.75-85, with stops now at cost.

EUR/JPY:159.47/50: No trades were done yesterday. We expect a “top” here now hence, we may chance 40% of the equity for a 80-90 pip downmove. If done keep a 40 pip stop.

Yesterday, the dollar’s most meaningful gain was against the Yen as carry trade demand continued to drive the currency pair higher. The two pieces of US data released today were jobless claims and help wanted ads, both of which dropped less than expected. Last week’s 359k print and this week’s 332k print suggests that the labor market may not have been as healthy this month as it was back in January. We still have 2 weeks before the non-farm payrolls report, but the outlook for labor market is very dollar friendly at the moment. On what was otherwise a relatively quiet trading day, we saw a brief burst of dollar weakness as rumors circulated that the terror alert would be raised. The Department of Homeland Security clarified shortly thereafter that there was no imminent threat, but the damage was already done. Earlier news that Iran is expanding rather than freezing their nuclear program already made the markets jittery about potential geopolitical risks, but the impact on the dollar was limited.
Elsewhere, the British pound is stronger across the board as the central bank injects more uncertainty about the outlook for monetary policy. Just after the market sent the currency tumbling on the back of less hawkish MPC minutes from the latest monetary policy meeting, Bank of England’s Chief Economist Bean reminded everyone that the central bank cannot afford to relax about inflationary pressures. Just as the sharp upward movement in inflation over the past year may have exaggerated the pick-up in underlying inflation, so the prospective fall back is likely to overstate the extent to which inflationary pressures have abated.” He indicated that it is difficult to know where rates are headed next and there are just as many upside as downside risks.
At the other end, the Euro ended the session lower against the US dollar. Economic data was mixed. Fourth quarter German GDP was confirmed at 0.9 percent. The breakdown of the data indicates strength in exports but weakness in government and private consumption. French, Italian and Belgium business confidence were all stronger than expected, which suggests that we could see strength in tomorrow’s much awaited German IFO report. The Belgium business outlook survey tends to have a strong correlation with the German IFO report. Having hit a record high back in December, even if we see a small pullback in German business confidence it may not be entirely bearish for the Euro. However, there remains a risk of a sharper pullback on the potential drag from the Value Added Tax increase.