By DailyFX – USDCHF – Dollar Data Dominates Dollar bulls got their fill of positive data today as durable goods orders and initial claims data… … were released to the upside, lending to continued strength in the world's largest economy.

Notably, with
durable goods orders relatively in line, initial jobless claims rose
less than expected after last week's decline to the lowest level in 5
years. Boding well for the economy, lower initial claims figures
signify a tighter labor market as growth has visibly picked up in the
U.S. As a result, traders responded by bidding up the greenback in
hopes that the current tightening cycle will continue well into 2006 and
maintaining the profitable interest rate spread on the pair.
Subsequently, price action looks to remain relatively staid entering the
asian session, as speculators look ahead to gross domestic product
figures for the fourth quarter. Contrary to earlier expectations,
consensus is anticipating a slower fourth quarter leading to a downside
print of overall productivity. Should the report be to the downside,
near term dollar weakness would be exacerbated along with pre-weekend
squaring.

Technically Speaking
Breaking through the consolidative ceiling at 1.2657 in the overnight,
current momentum is looking weak following a textbook, yet premature,
evening star formation just above the 38.2% fib at 1.2680. Confirming
the formidable resistance at 1.2718 (50% fib from the same 1.2881-1.2556
decline) is the death cross that looks to take on the 80 reference level
to the downside. With that said, current upside potential looks to be
capped at 1.2757 (61.8% fib from the aforementioned decline) with
imminent downside barriers at 1.2672 (10-hour moving average), 1.2657
(20-hour moving average), and 1.2632.

Rumorville
Dollar swiss bidding looks to commence beneath current spot prices at
1.2625. Stronger considerations reside below underpinning the pair in
the near term at 1.2575, daily lows from January 24th and 25th. With
stops eyed above at 1.2715, heavy selling pressure looks to enter upon
1.2750.

USDJPY

Inflationary Data In Focus
Propping up the USDJPY currency pair was less than expected Japanese
figures that were released in the overnight session. Although one
cannot ignore the overshadowing of U.S. data, the Yen releases did lend
some downside expectations in the near term for the world's second
largest economy. Notably, Japan's merchandise trade balance declined
19 percent on the annualized comparison as the cost of imported energy
rose over the year. Although still sporting a surplus for the month,
the disappointing data sparked notions that export volume may have
declined lending to further bearishness on the underlying denomination.
Separately, focusing on tomorrow's action, traders will be speculating
on any signs of inflationary pressures through both Tokyo and Nationwide
consumer price reports. With previous figures still suggestive of
deflationary pressures, any tick higher will more than bolster increased
speculation of another consecutive month of price increases.
Subsequently, this would prompt central bankers in considering the idea
of a rate hike before the end of the first half.

Technically Speaking
Finding formidable resistance at the 116.50 figure, dollar momentum was
cut short and looks to consolidate ahead of the Asian open. Forming a
textbook doji, bears look to re-enter and take the pair lower while
testing barriers at 116.16 (10-hour moving average) and 116 (confluence
of the 20-hour moving average and previous range resistance). A break
lower, here, would lead to definitive capping at the range support as it
forms a secondary confluence at 115.54 with the 50-hour MA and confirms
the death cross formation in the Stochastic. Next stop for bulls would
be an approach to 117.50, should the current ceiling weakly hold.

Rumorville
Yen supporters are residing around the 115.95 figure with further
strength below at 115.45. Stops are eyed above the current price at
116.50, highs hit on January 4th and 5th with heavy sell interests
topping out at 117.

NZDUSD

Kiwi Bulls Offered Opportunity
Falling to the downside, Kiwi bears broke through support floors over
the session after finding a formidable barrier just below the 0.6900
figure. Currently consolidating above the 100-hour moving average at
0.6838, further incremental downside potential looms as a flurry of
moving average barriers come in to play at 0.6846 (10-hour moving
average) and 0.6851 (50-hour moving average) in confluence with the 38.2
percent fib at 0.6846 from the 0.6995-0.6755 decline. With a break
above, momentum looks to be bolstered by a potential Stochastic golden
cross and a bottomside trendline for the price action to attempt the
0.6900 figure.

Rumorville
Initial bidding looks to resume slightly below market at 0.6815 where
range support was established on January 24th. With heavier
considerations below at 0.6760, near term price action could be well
supported. Stops are eyed above the 0.6900 figure or the January 10th
low with heavy considerations above at 0.6930.

By DailyFX