The market is waiting today for the release of US Chicago PMI which is expected to come lower again in Jan to 34.2 from 35.1 in December and US University consuming sentiment figures of Jan which is expected to get slightly higher to 56 from 54 in December.

We have had also today the release of US Q4 GDP advanced reading which was expected to be -5.2% and it has come better than expected at just -3.8%. The price deflator of this same quarter has come lower strongly too to -.3% and the market was expected just a decline to 2% from 3.9% in the third quarter showing increasing deflation pressure in US.

As we have formerly expected, the single currency profit taken pressure could take over after the recent massive decline of the single currency waiting for this .5% widely expected cut with Trichet upgrading the inflation outlook in the Euro zone by mentioning that it will pick up in the second half of this year.

The next intermediate resistance is at 1.331 then 1.3475 then a major resistance at 1.375 getting above this can meet a stronger resistance at 1.382 whereas the recent fall beginning. The way down can face further difficulties at 1.3 psychological supporting level then the major support level at 1.284.

Inability to break 1.394 again yesterday caused a break of 1.38 and stop loss triggering and even inability to stand above 1.3635 caused further selling and forming a lower high today at 1.356 and psychological break of 1.35 not the next support is at 1.33 then 1.294. For a longer time frame you can see that there is a formed lower high at 1.471 on the recent Single currency rally after the fed's cut by .75% to continue the major downward trend it has started by another failing lower than 1.44 at 1.4365 by the end of last year on the dovish interest rate outlook differential between the single currency and the greenback as the market is waiting for further massive ECB cuts while it is nearly over for the greenback. So, there is now a high downward momentum.

Best wishes, FX Consultant - Walid Salah El Din
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The negative interest rate outlook is still effecting negatively on the British pound pushing it lower across the broad even in the times of the greenback weakness the pound suffers versus the European currencies and comes lagged behind them specially the Swiss frank which was underpinned recently by the geopolitical concerns in the middle east and the tension between Pakistan and India.

The market is still waiting and ready for further bad news resulted from the credit crises and the negative growth outlook currently which supporting the reserving and waiting for a new change of this current market sentiment which can support the gold and the Swiss frank in the coming days. This stance put increased pressure on the GBPCHF which can continue lower than 1.5.