Forex Daily Outlook January 6, 2010

More range bound consolidative activity continued against most of the majors. We see potential for the dollar to weaken or stay within the recent range until later this week. Today, we anticipate the EUR/USD to head lower into the lower 1.43 level; breaking below yesterdays low and below the 200 day moving average opens up further room for a continued slide into the 1.42s. Longer term, our bias is for the dollar to continue declining and for the euro to go above the 1.50 level, as high as 1.55 and possible 1.60 sometime later this year. Still, we must be patient as there is still a lot of economic news. We do expect better than expected economic data to pressure the dollar for further losses as was the theme all of last year.

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