Overview

The USD traded within striking distance of its record low against the euro Wednesday, after economic reports boosted speculation that the interest-rate differential between the United States and the eurozone will continue to narrow.

Mixed readings on orders for U.S. durable goods and sales of new homes reinforced market expectations that U.S. interest rates have peaked at their current level of 5.25%. A strong reading on German business confidence fueled speculation the European Central Bank will continue to lift borrowing costs.

In front of Friday's first GDP report, it appears that dollar bears are biding their time to take another run at the euro/dollar record high. A clear break of that level will open up room for 1.37 and 1.38.

U.S. data so far this week has been uninspiring, with consumer confidence, existing-home sales and new-home sales all falling well short of market expectations. Until dollar bearish sentiment abates, buying the greenback remains a risky proposition at best.

Data for today

US: Weekly Jobless

For today:

- Sell USD/JPY around 118.80, with initial stops above 119.10. Or sell a break of 118.20, with stops above 118.40

For more ideas please email: tradingdesk@pinnacleforex.com