The Forex Market Shakes Off its Lethargy

Yesterday, the Forex Market threw off its lethargy in the early afternoon. Investors finally seem to respond to the constant good economic data dismissing fears that the global recovery was stalling. Risk appetite was also supported by the DXY index spiking lower and an hourly Stochastic bullish crossover. The low yielding USD and Yen fell rapidly against all the other majors with the EUR/USD hitting 1.4375 and the GBP/USD climbing to 1.6362.

UK data releases this morning posted Index of Services falling 0.6%, 2Q GBP contracting to 0.7% and Private Consumption falling to 0.7%.

In the Euro-Zone, Economic Confidence rose to 80.6 and its Business Climate Index climbed to -2.21.

After these releases, both the Euro and GBP remained well bid against the USD.

At 8.30am EST, US income and consumption data will be released.

At 10.00am EST, the very important University of Michigan Confidence figure will be posted.

If these figures are stronger than expected, further dollar weakness could result.