Today saw strength in the Japanese Yen after a positive new orders report was released prior to the day’s trading.  The Yen leveled off as the day ended, and traders lost initial enthusiasm on the Yen after a weaker than expected fixed asset investment report.

The Yen’s break of 89.44 suggests continued downside momentum during the duration of the week.  Yen traders are closely watching whether the crucial support at 88 will be breached.

The US Dollar began the session trading down on continued weakness after last week’s poor non farm payroll report.  The continued strength of gold prices portend to a further weakening US Dollar encouraging Forex traders to pile on with bearish bets.

The British Pound showed the most modest gains against the US Dollar as a result of rumors concerning possible loss of BOE’s AAA status.  Forex traders are keeping a close eye on future quantitative easing.

Remainder of Week

Thursday

5:00 AM   EMU – :Report on Industrial Production

7:00 AM   United States MBA Purchase Applications

8:30 AM   US:Report on Jobless Claims

11:00 AM  United States: Petroleum Status Report

Friday

2:00 AM   German Gross Domestic Product Flash Report

2:45 AM   French Consumer Price Index

2:45 AM   French GDP Flash Report

5:00 AM   Italian Gross Domestic Product Report

Going into the rest of the week many Forex traders are keeping a close eye on the USD/Swiss Franc swap.  Todays chart shows action coming exceedingly close to the critical support level at 1.003.  Traders expect accelerated momentum should this swap pierce this threshold which has held for the past 15 months.

Of course, traders will also be focused on the USD as it continues its dramatic decline. Technicians will be affixed to charts watching for critical support level breaks, and fundamentalists will be reading the tea leaves in an attempt to predict future Fed policies.