The euro continues to decline, although it is not going out without a fight. It is down against everything by multiple pennies already. Meanwhile The USD/JPY came close to the 61.8% Fibonacci retracement of the move from 2004 to last summer the level is 105.76. It tried to test it again today but did not have enough follow through to even approach it. Meanwhile CAD/JPY tested support at 1.0338 and is poised to try support again also. It looks like Japanese consumer confidence will need to be very strong at midnight for this to occur this week. Bernake was speaking before congress today and addressed a number of topics. His comments were not well received by the stock market which shed about 500 points today before a modest recovery. Bernake tried his best to talk down the dollar yet it remained resilient in defiance of the fed, actually gaining on the day against most currencies. The dollar really did well against both the Aussie Dollar and the New Zealand dollar despite the increase in retail sales. Most of that increase was due to gas prices and food prices anyways so the data was taken with a grain of salt. The Kiwi came within a whisker of the 68.1% retracement level on the move it made this summer at $.7545 bouncing nicely at $.7550.The Pound has managed to creep up over the key level of 1.9650 and managed to stay there for now. All eyes will be on England this morning when they release retail sales at 4:30am EST. Then when America wakes up Canadian manufacturing sales will be released at 8:30 am. The 200 day moving average is coming in at 1.0333 right now and is getting close to where the market is. This should provide some support for the Canadian dollar which is really leading the way for the rest of the currencies against the dollar. When The Canadian dollar recently got stronger everything else followed suit, now as it gets weaker the other currencies (save the yen and franc) are also weakening. At 10 am the U.S. consumer confidence will be released and is expected to fall slightly to 75 points even. This seems a little optimistic given the pessimism now prevalent in the people I talk too. Leading indicators are also expected to come out down .1% after last months’ .4% decline. I think these two figures could come in a little weaker than forecast and that lack of confidence in the greenback will lead to dollar selling tomorrow going into the weekend. As prudent traders book profits they made by buying a week currency.
