Will there be any nice sushi for the US dollar?

Forex reserve diversification has got a bit of limelight today, with Iran saying that it has reduced USD holdings to 20% of its total reserves. These days, it seems like the forex conveyor belt only brings USD-negative news, which is not doing any good for the US dollar. US consumer confidence survey for March dropped to a reading of 107.2 vs an expected reading of 108 (111.2 in February). Meanwhile, Euro got a boost from an unexpected rise in Germany's IFO measure of business confidence. The business climate index..


rose to 107.7 (106.3 forecast) from 107 in February, and this indicated that the huge tax raise in January didn't seriously dim the outlook for Europe's biggest economy.

This bullish outlook will certainly spark talks that the European Central Bank will increase interest rates again in June.

EUR/USD's nearest resistance is around 1.3350, then 1.3370, then 1.3400-10. Support is around 1.3320, then 1.3280-3300, then 1.3250-60.

USD/CHF looks quite bearish at the moment. It has the following possible topside barriers: 1.2170-80, 1.2200, 1.2230. Nearest support area is around 1.2100-10, then 1.2070-80, then 1.2030.

Market players will now awaiting congressional testimony from Fed Chairman Ben Bernanke on the US economy as well as data on US durable goods tomorrow.


Wednesday:

UK Nationwide house prices 0600 GMT

German GfK consumer confidence 0610 GMT

UK GDP 0830 GMT

Swiss KOF leading indicator 0930 GMT

US durable goods 1230 GMT

Fed Chairman Bernanke testifies 1330 GMT

New Zealand current account balance 2245 GMT

Japan retail trade 2350 GMT

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