Today’s fundamental news is very thin on the ground, with little in the way of concrete figures which are likely to provide any direction to the euro to dollar currency pair. Yesterday saw yet more sideways trading in the market, and from a technical perspective the currency pair are now beginning to set up for a major breakout accompanied with volatility, but this is unlikely to happen today, due to the lack of news. This morning saw the release of Industrial Production figures for France which came in at -1.8% against a forecast of -1.9%, so no great surprise to the market. This is generally considered a leading indicator of economic health – production reacts quickly to ups and downs in the business cycle, and is correlated with consumer conditions such as employment levels and earnings.

The only other significant item of news today is a statement by Fed Chairman Ben Bernanke, who is due to testify on the Federal Reserves efforts to provide liquidity in the current financial crisis before the House Financial Services Committee, in Washington DC. If the statement is more hawkish than expected then this is generally good for the home currency, in this case the US dollar.   The testimony usually comes in 2 separate parts, and in many ways similar to the ECB rate announcements which I mentioned a few days ago. The first part is pre prepared statement which he reads, which is then followed by a question and answer session from the committee. Since the questions are not known beforehand they can make for some unscripted moments that lead to heavy market volatility, so we may see some movement in the euro to dollar pair this evening (UK time). As head of the Central Bank, Bernanke has more influence over the US dollar than any other person in the US administration and his words ( both scripted and unscripted ) are analysed for clues as to future monetary policy by the FED.

Given the sideways movement of the currency pair in the last few weeks, and the the lack of news today, followed by this evenings speech by Bernanke, my advice would be to stay out of this currency pair for the time being until we have some clear trading signals.