With the State of the Union Address on Tuesday, the President would surely emphasize on the administration's accomplishment for both the economy and jobs creation looking forward with the agenda agreed during the meeting with Hu Jintao of China. Deals made and with a new economic team that strives for improve competitiveness in the global market in exports and jobs creation will highlight a positive tone for the US Dollar. Although, the troubles in Ireland have placed some slight pressure on the Euro as of this trading session at the levels of 1.3572 corrective move.
However, the reports for the week would play a significant part as UK GDP expected to be at 2.6 vs. 2.7 would weigh on the GBPUSD with some influence between the cross rate of the EURGBP to be steadier from the previous week working at 0.8514; whereas the 0.8550-80 levels may find some resistance for the next corrective move thereafter.
On the other hand, the USDX would rely more from the coming FOMC meeting, Durable goods orders, Consumer Confidence from the University of Michigan and the Friday's US Gross Domestic Product. These reports would be dictating the directional trend for the USDX in spite of its technically motivated bearish chart formation both on a daily and weekly basis. With an opening week of 78.30bp would provide a week of wider fluctuations on both directions but would maintain a bearish tone as it has indeed been bid-off to the lows below the 78.65/80 levels. And its initial target of 78.05 would be re-tested but will find some bouncing support and fresh longs on these levels. Most of the bullish positions has been settled from smaller speculators found mostly from retail trades.
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