Dollar could extend rally during Asian session

Dollar could extend the bullish rally through Asian session today, after breaking under some key supports against major rivals; still, European majors remain in the same range seen since early June, and does not seem likely to actually be broken in the short term. Despite greenback benefit today from positive U.S. data, the backdrop of optimism about the global economy hasn't gone completely away, and would take further U.S. signs of recovery, to reverse the inverse correlation between good American data and rising high yielding currencies.

Regional stock markets have no cues from Wall Street that closed flat; again not only Nikkei 225 will be watched but also the Shanghai composite. Expect majors to remain range bound, ahead of Thursday European and American data, that will include among others, housing reports in the UK, Consumer confidence in the Euro zone, and U.S. preliminary GDP.

EUR/USD remains under key 1.4250 level, with immediate resistance at 1.4280 zone; failure to regain 1.4250, will mean a retest of the 1.4200 lows, ahead of 1.4160; GBP/USD likely to remain under pressure despite oversold conditions, capped by 1.6275/1.6300 area.