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Dollar Index Tests 80.00

Jan. 05, 2011 9:32 AM ET
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U.S. ADP employment numbers were strong, but with little equity or forex reaction of note initially. Traders await the completion of near-term cycles on the major pairs that will set up a raft of mid-term and long-term potential trades. January looks to be building potential to be a very busy month for currency trade.

Wednesday trade moved forex to test Usd resistance ahead of a raft of U.S. red-flag economic releases that hit the wires this week, with Eur/Usd being the largest mover down against the dollar. Most pairs were at their opening prices as European equities sold off and tested 6890 support on the German Dax in a drop of over 2% on the previous session high, but most currencies moved lower against the dollar as U.S. trade got underway.

Global commodities consolidated at support after the previous session sell-off as traders await confirmation that the one-day up one-day down pattern of trade will play out rather than this being the start of a bear market move in metals and oil.
The dollar index broke 80.00 resistance and in doing signaled that the greenback may be in for a period of buying if S&P 500 futures trade is contained under 1270 and the economic indicators this week print as expected.

The U.S. ADP numbers showed 297k private sector jobs added last month, in a pre-cursor to a positive Non-farm Payroll read on Friday. Equity reaction to the numbers has been muted which has allowed the Usd to find buyers.



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