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Session Recap: The status quo prevails; Dollar remains at its place

FXStreet (San Francisco) - Choppy session on Thursday in the foreign exchange market as investors have doubts about where to go. It was not a rollercoaster at all, but EUR/USD, GBP/USD and the USDJPY were rising and falling all day long before closing with minor changes.

Investors welcomed the higher inflation, ex food and energy, in 3 months, especially after the Fed's concerns about falling prices. But the market was really surprised by the explosion of the Philly Fed Manufacturing to its highest figure since March 2011 at 40.8. The employment component jumped to 22.4 from 12.10; new orders from to 35.7 from 17.30.

However, the US dollar was not able to take advantage of the data and remained tied to its range. The Market is now considering the USD is losing luster.

As Boris Schlossberg from BKForex
aptly said in his Twitter account: "The yen is the new pound" as an attempt to explain the Yen current behaviour. The USD/JPY advanced for sixth day in a row to test the 119.00; however the pair failed to break above it and retraced before closing at 118.15.

Traders took profit near to 119.00 and sent the pair to an intraday low of 117.70. "Considering the pair added over 1000 pips ever since the BOJ announced a surprise round of stimulus past October 31st," Valeria Bednarik from FXStreet comments, "risk of a stronger downward corrective movement has increased exponentially, moreover on a break below afore mentioned 117.10 level, now the line in the sand for a bearish breakout."

The EUR/USD declined after two positive days but the pair moved mostly inside its recent rage and closed at 1.2540. Watch for 1.2575 to the upside, and 1.2500 to the downside. The GBP/USD advanced for second day and the idea that the GBP/USD set a double bottom at 1.5590 seems more likely.

The DJIA and the S&P closed at records and the Nasdaq finished at highs since March 2000. Oil jumped to 76.30 a recovered all its weekly losses. The gold was unable to break above 1,195 dynamic resistance and it closed down at 1,192 before testing the 1,197 level.

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