Daily Analysis Thread

[ForexPros]

Today’s US Dollar Trading
• USD two-way all day
• Starts on the offensive—ends on the defensive
• GBP and EURO at technical resistance.

Overnight Preview
• Look for a quiet evening ahead of FOMC

Looking Ahead
All times EASTERN (-5 GMT)
• 8:30am USD Core Durable Goods Orders m/m
• 8:30am USD Durable Goods Orders m/m
• 10:00am USD New Home Sales
• 10:30am USD Crude Oil Inventories
• 2:15pm USD FOMC Statement
• 2:15pm USD Federal Funds Rate

Summary
Despite a better start overnight the USD was unable to hold significant gains today after the release of disappointing US data gave traders a reason to sell the Greenback. Although the early volatility was important enough to make new highs or lows on the day for the USD it wasn’t enough to put most pairs into new ranges; traders note that volumes were moderate and both sides seemed to find a reason to take a stand. Trading has been muted the past 24 hours with most desks reporting that concern over the FOMC rate announcement due out tomorrow is keeping larger players quiet; although larger names have been seen at the highs or lows today. Cable initially firmed following EURO but took at hit when the UK mortgage numbers overnight were less than inspiring. Falling to a low print at 1.9622 in early New York the GBP reversed course and rallied to a high print at 1.9726 before offers capped the move today. US data lifted both the GBP and the EURO but neither pair could hold gains as both pairs were at technical resistance during the day. EURO stalled just above the 50 bar MA for a high print at 1.5623 before falling back and leaving a long selling wick on the day. I suggested earlier in the day to liquidate your long EURO position and if you are holding longs still be ready to exit those positions overnight. I don’ think the EURO has what it takes to hold above the 50 bar MA near-term. USD/JPY broke down to post a daily low at 107.36 before rallying all the way back to the 108.00 handle; then dropping mid-range on the close. At no time did the rate ever make the impression it intended to break out to a new high or a new low. Traders note that the rate is simply stuck in an existing range and may be there through the FOMC announcement tomorrow. Swissy also broke to new lows at the 1.0348 number before bouncing off the 50 bar and 100 bar MA’s on the daily chart. In my view, the USD/CHF is firming a bit too much to be short. I would look to take the trade off the next 24 hours if the rate continues to gain above the 1.0400 handle near-term; such as overnight. In my opinion, the USD will cover a lot of the same ground tonight and into the FOMC meeting tomorrow. Look for a rally as a selling opportunity.

EURO/USD Daily
Resistance 3: 1.5680
Resistance 2: 1.5650/60
Resistance 1: 1.5620
Latest New York: 1.5567
Support 1: 1.5500/1.5490
Support 2: 1.5470
Support 3: 1.5450

Comments
Rate unable to hold gains after surprise rally into the 1.5620 area; long selling wick companion to the bid wick from Monday. Rate likely stuck in tighter range for now. Russians buying EURO a good sign but watch for model accounts on the bid the next few days. The 50 bar MA offering resistance; close over the 50 bar likely to draw more buying early in the week but for now there is pressure coming on in that area. Bids will likely be in the 1.5500/20 area or so. Expect higher action this week as late shorts get squeezed. If long, better to get flat or reverse.

Data due Wednesday: All times EASTERN (-5 GMT)
4:00am EUR ECB President Trichet Speaks
4:00am EUR Italian Retail Sales m/m

USD/JPY Daily

Resistance 3: 108.80
Resistance 2: 108.50
Resistance 1: 108.20
Latest New York: 107.76
Support 1: 107.20/30
Support 2: 107.00
Support 3: 106.80

Comments
Rate whipsaws around current S/R; unable to gain traction above or below recent boundaries. Volumes lighter and upside resistance is firm at 108.00 area or a shade higher. Failure to close above the 108.00 handle Monday a good sign rate is ready to break back to the lows looking for stops under the 107.10/107.00 area. Exponential reversal signal still valid, rate is two-way but weaker each day. If short—let it work. If today’s rally fails under the 108.00 handle look for a drop into stops under the 107.00/10 area the next 24 hours. Look to add if rate can hit the stops in the 107.00 area near-term. Some topping seen; expect volatility. USD likely not this strong but more benefiting from Yen weakness. Stops likely rolled up under the 107.00 area for today so if a break happens—look for a drop to the 106.00 handle fairly quickly.

Data due Wednesday: All times EASTERN (-5 GMT)
NONE

Analysis by: Forexpros.com written by Jason Alan Jankovsky

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

[ForexPros]

Today’s US Dollar Trading
• USD whipsaws after early sideways start
• US data unfriendly to the Greenback
• As expected, FOMC holds rates firm

Overnight Preview
• USD likely to continue to weaken
• EURO above resistance

Looking Ahead
All times EASTERN (-5 GMT)
• 8:30am USD Final GDP q/q
• 8:30am USD Unemployment Claims
• 8:30am USD Final GDP Price Index q/q
• 10:00am USD Existing Home Sales
• 10:35am USD Natural Gas Storage

Summary
As expected the FOMC held interest rates steady and left the discount window on hold too. The statement was full of the usual “Strong Dollar” rhetoric but after the initial brief USD rally into expected S/R the Greenback reversed hard and fell to new lows on the day across the board. Stops were seen in all pairs but active selling of USD was noted by several shops as the USD made highs around the FOMC announcement. Traders were not surprised at the strength of the reversal or the speed and many expressed concern that the USD will get ahead of itself on a decline before the ECB has a chance to raise rates next week. GBP rallied for a high print at 1.9771 after the announcement; traders note that stops were elected at 1.9740/50 area after the first push to there was repelled during the day. In other words, shorts sold ahead of the news and placed their stops close-in expecting a drop which never happened. EURO plowed through near-term resistance and is no officially rallying; stops placed around the 1.5630 area were triggered as layered supply above the 1.5600 area was absorbed after the news. EURO now has no top ahead of the 1.5800/20 area some traders say and a sustained rally may be in the works for tomorrow and Friday. Should the EURO clear the 1.5800 area or beyond by the end of the week that would make this month an engulfing month on the charts—a very bullish scenario. USD/JPY failed to inspire trade either way for most of the day preferring to hover at the 108.00 handle until the Fed news; a brief rally to 108.43 high print was sold aggressively and the rate reversed into low prints at 107.65 within minutes. The rate is unable to break out of the 108.40-107.00 range that has plagued this pair for over a week. When it finally goes one way or the other it could be a spectacular move. USD/CHF also reversed hard making lows on the day at 1.0340; traders expect more. Almost lost in the day’s action was earlier US data, Durables were flat and housing was lower; traders expect that more unfriendly news will be seen for tomorrow as well. In my view, nothing to do but buy dips in EURO and add to open shorts in other pairs.

EURO/USD Daily

Resistance 3: 1.5800
Resistance 2: 1.5750/60
Resistance 1: 1.5720
Latest New York: 1.5674
Support 1: 1.5550/60
Support 2: 1.5500
Support 3: 1.5450

Comments
Rate blasts through resistance and makes highs for the week. Better EMU news helps keep the rate firm. US news likely to create volatility. Russians buying EURO again overnight a good sign but watch for model accounts on the bid the next few days. The 50 bar MA offering resistance; close over the 50 bar likely to draw more buying tomorrow. Bids will likely be in the 1.5580 area or so on any meaningful correction. Expect higher action this week as late shorts get squeezed.

Data due Thursday: All times EASTERN (-5 GMT)
2:00am EUR German Import Price Index m/m
4:00am EUR M3 Money Supply y/y

USD/CHF Daily

Resistance 3: 1.0520
Resistance 2: 1.0500
Resistance 1: 1.0470/80
Latest New York: 1.0350
Support 1: 1.0320/30
Support 2: 1.0300
Support 3: 1.0270/80

Comments
Tight range and low volumes overnight; rate likely to whipsaw today so be ready for volatility. Looking to add to position if rate can clear under the 1.0300/10 area. Rate stuck in a range but still looking to support/resistance hovering around the 100 bar MA. Overhead resistance now at the 1.0480 area. Rate continues to rotate around the 100 bar MA area; a sell off to end the day today would be ideal to set-up for further losses during the week. Buyers appear to be technical traders and expect some momentum accounts on the bid soon. No doubt some bids are profit-taking from the shorts but that won’t last in my view. In my view, the rate needs to be sold on any strength. Hourly sell signals also suggest that the rate is ready to rotate lower again.
Data due Thursday: All times EASTERN (-5 GMT)

NONE

[ForexPros]

Overnight Asia/Europe
• USD starts firm, weakens into Europe
• Stops triggered on the way down
• Traders report good volume

Today’s Economic Reports
All times EASTERN (-5 GMT)
• 9:45am USD Chicago PMI

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 10:00am USD ISM Manufacturing Index
• 10:00am USD ISM Manufacturing Prices
• 10:00am USD Construction Spending m/m
• Tentative USD Domestic Vehicle Sales
Expect ISM to remain weak.

Summary
The USD started Asia on the defensive as most of the major pairs rallied again to new near-term highs against the Greenback; Cable and EURO finding previous resistance a bit tougher to break and stalling at previous monthly highs. Cable high print at 1.9968 roughly in line with previous highs in the same area from late April and reversing to go negative on the day shortly after the European open. Disappointing UK mortgage approvals put the pressure on Sterling again and the rate made lows just ahead of the US open at 1.9894. EURO made a high print in Asia at 1.5837 before reversing along with GBP; low prints in early New York at 1.5745 before light bids supported the rate off the lows. Both GBP and EURO are tracking each other as cross-spreaders continue to work the Yen side of the crosses; speculation is high that the Yen will continue to weaken against most pairs but today appears to be a profit taking day as the reversals are in all Yen crosses.USD/JPY was pressured into new monthly lows completing a reasonable fib retracement target for a low print in Europe at 104.98 before bids were seen and a short squeeze resulted. The rate has recovered to the 105.60 area in light trade as New York gets underway. Stops reported at the 105.50 area on the way down and again on the way up suggesting late traders are getting whipsawed. USD/CHF dropped in tandem with other USD weakness falling to a low print at 1.0130 before a short squeeze took the rate back over the 1.0200 handle; traders note that across the board in all pairs stops were elected from what appears to be the late USD long. That being said, the probability of additional volatility and likely recovery now that the stops have been run is higher; aggressive traders can look to short EURO above the 1.5770 area and take gains on the Short USD/JPY and USD/CHF positions around current pricing if still in from the weekend. Although the trend is lower for the USD I expect a lot of potential volatility this week and the next thing is to re-short on strength if we get it. Look for the USD to rally into previous resistance across the board and we can re-short it there. Today’s PMI data likely to inspire a bout of volatility.

EURO/USD Daily

Resistance 3: 1.5900
Resistance 2: 1.5880
Resistance 1: 1.5830/40
Latest New York: 1.5768
Support 1: 1.5720
Support 2: 1.5680
Support 3: 1.5650

Comments
Rate not supported by higher Oil today suggesting a near-term top. Stops noted under the previous lows layered under 1.5700 traders say. Closes near the 1.5800 handle from last week, more upside likely but a pullback is needed. Asian sovereign selling seen overnight. US news today likely to create volatility so be ready for whipsaw or a reversal. Should cable break—EURO could go with it. Watch for model accounts on the bid today; those guys love to buy highs. The 50 bar MA likely to offer support should the rate fall back; close over the 50 bar likely to draw more buying to end the week. Bids will likely be in the 1.5580 area or so on any meaningful correction. COT data show a flip to EURO longs; could be a clue for a top.

Data due Tuesday: All times EASTERN (-5 GMT)
3:55am EUR German Unemployment Change
5:00am EUR Unemployment Rate

USD/JPY Daily
Resistance 3: 107.80
Resistance 2: 107.20/30
Resistance 1: 106.50
Latest New York: 105.56
Support 1: 10500/104.90
Support 2: 104.50
Support 3: 104.20

Comments
Rate continues on follow-on weakness, strong bids noted suggesting a whipsaw bounce is coming. Today’s dip under the 105.00 handle lacked conviction and a potential rally may develop early; sell that rally early next week if we get it. In the meantime, OK to liquidate shorts and wait. Exponential reversal signal still valid, rate is two-way but weaker each day. Stops in the 105.80 area cleared overnight; traders note stops were both ways. Cot data show a flip to Yen longs suggesting a bottom is in.
Data due Tuesday: All times EASTERN (-5 GMT)
7:50pm JPY Monetary Base y/y

Analysis by: Forexpros.com written by Jason Alan Jankovsky

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

[ForexPros]

Today’s US Dollar Trading
• USD loses ground but attempts a recovery
• Stops run
• Volumes moderate

Overnight Preview
• Two-way action likely

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 10:00am USD ISM Manufacturing Index
• 10:00am USD ISM Manufacturing Prices
• 10:00am USD Construction Spending m/m
• Tentative USD Domestic Vehicle Sales
Expect ISM to remain weak.

Summary
The USD is two-way and whippy today after a losing start to the day. Across the board the USD made monthly lows to end the quarter no doubt creating a lot of risk-aversion liquidation ahead of US data and the holiday-shortened trade week. GBP has upside resistance at 1.9960 area challenged more than once on several rallies but each time the market backed off to trade lower. Into the London fix rumors of buy-needs kept the rate firm but once the fix was gone traders sold the rate lower and the GBP made lows for the day at 1.9878; rate continued to whipsaw short-term accounts as the GBP rallied off the low to trade above the 1.9940 area briefly again. For the most part the EURO had a similar day but dropping Oil prices helped to keep the pressure on more-so than GBP. EURO had a high print at 1.5837 but once the highs were in during European trade the EURO settled back to trade lower all day. Traders note that in both pairs volumes were moderate and with a lower close likely all offers. USD/JPY remained on the defensive most of the morning but staged a modest recovery after the London fix as well coming close to the overnight highs with a New York high at 106.25 areas. Traders say the rate is likely to remain two-way as Asian sovereigns have an appetite for USD on the dips while exporters are on the offer during any strength. The rate held the 105.00 handle on the morning break suggesting that a rotation higher might be good for a test of the breakdown area around the 107.50 area near-term; should that be the case there is a lot of volatility there. Swissy weakened as well but held lows at 1.0130 which were never challenged in New York trade. USD/CHF likely to weaken more but the rate wants to rotate high and was the only major pair higher on the day today. Loonie rallied as well and cleared the 1.0200 handle briefly suggesting a lot of two-way action is coming. The rate settled back after scoring a high at 1.0215 in two way action. Traders note that volume were good in all pairs and more two-way action is due across the board. In my view, the Greenback is set to rotate higher ahead of Non-Farm payrolls later in the week. Although whipsaw is likely as well, I think your best strategy is to sell rallies and wait for the upside correction in USD to fail.

EURO/USD Daily
Resistance 3: 1.5900
Resistance 2: 1.5880
Resistance 1: 1.5830/40
Latest New York: 1.5742
Support 1: 1.5720
Support 2: 1.5680
Support 3: 1.5650

Comments
Rate not supported by higher Oil today suggesting a near-term top. Closing lower suggests some selling pressure is developing. Stops noted under the previous lows layered under 1.5700 traders say. Closes near the 1.5800 handle from last week, more upside likely but a pullback is needed. Asian sovereign selling seen overnight. US news today likely to create volatility so be ready for whipsaw or a reversal. Should cable break—EURO could go with it. Watch for model accounts on the bid today; those guys love to buy highs. The 50 bar MA likely to offer support should the rate fall back; bids will likely be in the 1.5580 area or so on any meaningful correction. COT data show a flip to EURO longs; could be a clue for a top.

Data due Tuesday: All times EASTERN (-5 GMT)
3:55am EUR German Unemployment Change
5:00am EUR Unemployment Rate

USD/JPY Daily
Resistance 3: 107.80
Resistance 2: 107.20/30
Resistance 1: 106.50
Latest New York: 106.23
Support 1: 10500/104.90
Support 2: 104.50
Support 3: 104.20

Comments
Rate continues on follow-on weakness, strong bids noted suggesting a whipsaw bounce is coming. Close back over the 106.00 area suggests a rally soon. Today’s dip under the 105.00 handle lacked conviction and a potential rally may develop early; sell that rally if we get it. In the meantime, OK to liquidate shorts and wait. Exponential reversal signal still valid, rate is two-way but weaker each day. Stops in the 105.80 area cleared overnight; traders note stops were both ways. COT data show a flip to Yen longs suggesting a bottom is in.
Data due Tuesday: All times EASTERN (-5 GMT)
7:50pm JPY Monetary Base y/y

Analysis by: Forexpros.com written by Jason Alan Jankovsky

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

[ForexPros]

Today’s US Dollar Trading
• The Greenback whipsaws, ends weaker
• EURO holds 1.5800 handle with conviction
• Volumes lighter

Overnight Preview
• Traders look for a quiet evening ahead of Thursday
• Expect volatility

Looking Ahead to Thursday
All times EASTERN (-5 GMT)
• 8:30am USD Nonfarm Employment Change
• 8:30am USD Unemployment Rate
• 8:30am USD Average Hourly Earnings m/m
• 8:30am USD Unemployment Claims
• 10:00am USD ISM Non-Manufacturing Composite

Summary
The USD whipsawed both bulls and bears today after a surprise ADP report ignites a round of USD selling. Most of the major pairs rallied to test near-term resistance and the Greenback went on the defensive shortly after the news this morning after building a nice base of firmness overnight. Dropping through several support levels the USD found stops and active selling to drive it into previous weekly lows; traders note that volumes were not impressive and suggest that the break may be a bear trap ahead of US and ECB data tomorrow. GBP failed to rally to new highs but tracked EURO higher after the news. Stops above the 1.9920/30 area triggered after shorts took control under the 1.9900 handle briefly this morning. Highs at 1.9977 went unchallenged despite the rally in EURO. Scoring new weekly highs and a new 30 day high at 1.5889 EURO remained bid all day after stops above the 1.5850 area were triggered. Traders note that volumes were lighter but can’t argue with the near-term strength. Poor US data is expected tomorrow and a 25 BP rate hike by the ECB is keeping the rate bid. Many traders are sidelined ahead of tomorrow’s news due to the fact that the rate is at the levels it should be at for the hike and poor US news. In my view, the EURO is setting up for a correction lower and today’s strength is possibly a bull trap. Tomorrow will be hard to play as the markets close early in the US after a slew of important fundamentals. USD/JPY looked strong this morning then broke back sharply as the USD was sold across the board; traders note that the rate is a full handle lower than the highs at the open. In my view the USD is having a knee-jerk reaction and USD/JPY is likely to recover into tomorrow’s action. Aggressive traders can look to buy the rate on weakness under the 105.80 area near-term. Swissy and Loonie both broke back to go neutral on the day after scoring important 24 hour highs. In my view, the USD is whipsawing both sides and neither the bulls nor the bears have the upper hand. Expect more volatility on Thursday as the ECB meeting/press conference add fuel to the US data due out about the same time. With an early close it will be a volatile day so if not positioned with a lead it is OK to stay flat and come back next week.

EURO/USD Daily

Resistance 3: 1.5950
Resistance 2: 1.5920/30
Resistance 1: 1.5900
Latest New York: 1.5875
Support 1: 1.5770
Support 2: 1.5720
Support 3: 1.5680

Comments
Rate rallies hard after ADP surprises, stops elected above the 1.5860 area. Rate whipsaws lower then higher and makes highs on light volume ahead of US news tomorrow. Highs were sold aggressively by Asian sovereigns traders say but rate is firm. Lots of stops building under the 1.5770 area and a break lower is likely on whipsaw Thursday. Stops noted under the previous lows layered under 1.5700 traders say. US news tomorrow likely to create volatility so be ready for whipsaw or a reversal. Should cable break—EURO could go with it. The 50 bar MA likely to offer support should the rate fall back; bids will likely be in the 1.5580 area or so on any meaningful correction. Equities weaker also no help.

Data due Thursday: All times EASTERN (-5 GMT)
4:00am EUR Services PMI (p)
5:00am EUR Retail Sales m/m
7:45am EUR Minimum Bid Rate
8:30am EUR ECB Press Conference

USD/JPY Daily

Resistance 3: 107.40/50
Resistance 2: 107.20
Resistance 1: 106.80
Latest New York: 105.97
Support 1: 105.70/80
Support 2: 105.50
Support 3: 105.20

Comments
Rate gives back overnight gains on whipsaw, likely to trade both sides of unchanged tonight ahead of US data tomorrow. Rate firms up on large cross-spreading traders say; look for a push on stops around the 107.00 handle. OK to place a resting order at the 107.50 area to sell the rate. Bids noted at 105.70/80 area suggesting a firm bottom is in near-term. Sell a rally if we get it. Exponential reversal signal still valid, rate is two-way but a correction is coming and should be a low-volume affair. Offers layered to 107.50 some desks report so upside may be labored above the 106.50 area; stops above 106.80 or so. Expect more two-way action overnight ahead of US data.

Data due Thursday: All times EASTERN (-5 GMT)

NONE

Analysis by: Forexpros.com written by Jason Alan Jankovsky

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

[ForexPros]

Today’s US Dollar Trading
• USD reverses higher after a lower open in New York
• Traders note stops and liquidation off the lows
• USD/JPY flirts with close above the 200 bar MA

Overnight Preview
• Look for the USD to consolidate
• Two-way action ahead of minor news tomorrow

Looking Ahead to Wednesday
All times EASTERN (-5 GMT)
• 10:35am USD Crude Oil Inventories
• 2:00pm USD Beige Book
Continuing the slow start for US data this week.

Summary
After a low-volume sell-off this morning to trade at the worst levels of the day the USD rallied back hard to run stops and squeeze shorts all day into the close. Traders note that volumes increased dramatically once the reversal began to gain momentum and across the board the USD rallied through resistance to close at some critical numbers for the USD bulls. Cable tracked EURO lower as expected but found large stops resting in the 1.9930/40 area and traded to a low print at 1.9894 briefly before holding above the 1.9900 handle but well below the trigger point for the stops. EURO had a similar day eventually finding stops under the previous week’s low at 1.5780 area for a low print at 1.5756 before bouncing; the rate unable to regain the 1.5800 handle into the close making for a potential reversal today. Traders note that with the increase in volume on the rally for the Greenback it is possible that the USD has put in the low for the week; the majors have all completed minor reversal patterns suggesting the same. Although there was a bit of profit taking by the longs this afternoon the USD/JPY held onto solid gains above the 107.00 handle and closes around the 200 bar MA; stops were elected above the 107.20 are and high prints at 107.45 before a drop in volume and a fall back to the 107.10/20 area. Traders note that the rate has closed at the 200 bar MA which has ignited volatility in recent trade and more upside is expected to be sold with some traders suggesting offers ready at the 107.80 area. Today’s rally and test of the 107.50 area suggests that the USD has more upside ahead before a fall back making the ranges the Greenback has a bit wider and subject to more whipsaw. In my view, the USD has shown enough strength to look for another add point on the current open trades. I think aggressive traders can look to sell the GBP and the EURO around the closing levels today and look to buy more USD/JPY tomorrow after the Asian session. If oil continues to weaken early in Asia I think the USD/JPY could advance into reported stops above the 107.80 area and possibly challenge the 108.00 handle for the day; an excellent short potential I think. For tonight I look for two-way consolidation with a better bias for the USD.

GBP/USD Daily
Resistance 3: 2.0120
Resistance 2: 2.0100
Resistance 1: 2.0080
Latest New York: 1.9905
Support 1: 1.9880
Support 2: 1.9840/50
Support 3: 1.9820

Comments
Sell more into the close, rate drops after low-volume rally stalls. Stops at 2.0050 area, volumes very light. Traders report interest on the sell side from large names and Asian Sovereigns. Rate tracking EURO as expected but unable to break out either way yet. Hold shorts; look to add on further weakness below the 200 bar MA. ADD today for aggressive traders. Bids under the 1.9950 area likely cleared, stops likely now after upper stops cleared. Offers from large names traders say; if 1.9950 fails on the close it could be a big drop. Traders expect GBP to track EURO through this week. Continue to expect a lot of cross-trading.
Data due Wednesday: All times EASTERN (-5 GMT)
4:30am GBP MPC Meeting Minutes
4:30am GBP BBA Mortgage Approvals
6:00am GBP CBI Industrial Trends Orders

EURO/USD Daily

Resistance 3: 1.6000
Resistance 2: 1.5980
Resistance 1: 1.5950
Latest New York: 1.5769
Support 1: 1.5750
Support 2: 1.5700
Support 3: 1.5650

Comments
Rate still two-way and extends range to start today; stops above the 1.5900/10 area triggered this morning. Try for highs on very low volume. Aggressive traders can ADD on this rally as volumes are low and this might be a head-fake. Rate closing under the 1.5800 area is another ADD, hold shorts and let it work. Stops under the 1.5800 area likely in size; expect a sharp break and a close under the 1.5800 area. Large names on the offer reported into the highs, look for a top to form. Major support at the 1.5580 area and slightly below. The 50 bar MA likely to offer support should the rate fall back; bids will likely be in the 1.5580 area or so on any meaningful correction; which is a long way away at this point. Exponential reversal still valid.

Data due Wednesday: All times EASTERN (-5 GMT)
2:45am EUR French Consumer Spending m/m
4:00am EUR Italian Retail Sales m/m
5:00am EUR Industrial New Orders m/m

Analysis by: Forexpros.com written by Jason Alan Jankovsky

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

[ForexPros]

Today’s US Dollar Trading

• USD regains poise after early break
• Oil and equities help the upside
• Volumes moderate

Overnight Preview
• Expect two-way action
• USD to consolidate

Looking Ahead to Thursday
All times EASTERN (-5 GMT)
• 8:30am USD Unemployment Claims
• 10:00am USD Existing Home Sales
• 10:00am USD FOMC Member Geithner Speaks
• 10:35am USD Natural Gas Storage

Summary
After a slide overnight against GBP and EURO the USD rallied back in late US trade to regain some territory after oil continued to slide and equities put on some weight. The Greenback is at better levels against all the majors than the start of US trade and is poised to challenge stops above the market across the board. Today’s US data was benign and more important data is due for tomorrows release and some traders are looking for the USD to make additional highs for the week although today’s rally volumes were not impressive suggesting that the majors are consolidating recent losses before making a more pronounced move the next 24-48 hours. Cable rallied above the 2.0000 handle but as been the custom above the 200 bar MA does not “feel comfortable” holding gains; the GBP fell back to trade the mid-1.9900 area leaving a strong selling wick above the market. Highs at 2.0032 were on very light volumes and largely stop driven before dropping back to make US lows under the 1.9970 area. A close below the 1.9950 area again is needed to drive the longs to the sidelines and that may come on the Tokyo open in my view. EURO fell as oil slid off and making lows for the US session and the forex day as well; some stops cleared as the rate dipped under the 1.5680 area for a low print ahead of the close at 1.5669; volumes were modest most desks report. USD/JPY struggled with offers at the 108.00 area managing a high print at 107.98 but has not retreated more than a few pips suggesting that a try for stops above the 108.00 area may be on the hook for tonight’s action. Aggressive traders can place a resting limit order to liquidate longs at 108.25 looking for a test of offers at the 108.40 area; if you are really aggressive you might try a close and reverse but with US housing data still to come there is potential for the rate to try for the high 108’s the next 24 hours. Minor whipsaw today paved the way for small accounts to get cleared as they have been on the wrong side of the stops near-term. In my view, look for the USD to consolidate with a bit more upside on the books overnight.

GBP/USD Daily
Resistance 3: 2.0080
Resistance 2: 2.0050
Resistance 1: 2.0020/30
Latest New York: 1.9973
Support 1: 1.9880
Support 2: 1.9840/50
Support 3: 1.9820

Comments
Rate rallies back in lighter volume, stopped out of third add. Potential for large range overnight unexpected and likely more head-fake. OK to add again if rate fails from the highs by the end of the day. Stops at 2.0050 area but offers are there too traders say. Traders report interest on the sell side from large names and Asian Sovereigns but they were on the bid from the lows overnight this time. Rate tracking EURO as expected but unable to break out either way yet. Hold shorts; bids under the 1.9950 area likely cleared, stops likely now after upper stops cleared. Offers from large names traders say; if 1.9950 fails on the close today it could be a big drop. Traders expect GBP to track EURO through this week. Continue to expect a lot of cross-trading.
Data due Thursday: All times EASTERN (-5 GMT)
4:30am GBP Retail Sales m/m
1:00pm GBP MPC Member Bean Speaks

EURO/USD Daily
Resistance 3: 1.5900
Resistance 2: 1.5850
Resistance 1: 1.5800/10
Latest New York: 1.5685
Support 1: 1.5650
Support 2: 1.5620/30
Support 3: 1.5580 (MAJOR SUPP)

Comments
Rate still two-way, dragged higher by Cable but offers at 1.5750/60 capped any further daily strength today. Stops above the 1.5820 area out of reach so far today. Hold shorts and let it work. Stops under the 1.5700/1.5680 area likely in size; expect a sharp break and a close under the 1.5700 area if triggered. Large names on the offer reported into the highs, look for a top to form. Major support at the 1.5580 area and slightly below. The 50 bar MA likely to offer support should the rate fall back; bids will likely be in the 1.5580 area or so on any meaningful correction; which is looking better after the break this week. Exponential reversal still valid.
Data due Thursday: All times EASTERN (-5 GMT)
3:30am EUR German Manufacturing PMI
3:30am EUR German Services PMI1
4:00am EUR German Ifo Business Climate Index
4:00am EUR German Ifo Business Expectations Index
4:00am EUR Manufacturing PMI
4:00am EUR Services PMI
4:00am EUR Current Account

Analysis by: Forexpros.com written by Jason Alan Jankovsky

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

[ForexPros]

Today’s US Dollar Trading
• Unusually quiet, little volume
• Ranges hold for the most part
• No real push either way with any conviction

Overnight Preview
• Look for more quiet action
• Two-way and technical action to continue

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 9:00am USD S&P/CS HPI Composite-20 y/y
• 10:00am USD Consumer Confidence Index

Summary
Despite a mixed opening and solid two-way trade, none of the majors were able to extend gains against the USD today in super-light trading. Cable scored a modest new high from overnight action, as did Yen, but all the major pairs continue inside previous support or resistance with modest interest on both sides remaining after the first day of trading for the week. GBP held gains made in New York reversing off the lows seen in late Europe but still not attracting large size. Most of the action was considered drifting trade with little impetus behind it suggesting the GBP was drifting higher from lack of selling rather than outright buying. Trader’s note that “absolutely nothing” was going on after the London fix. EURO remained stuck inside a very tight 30 point range after the fix which saw some EURO selling but not enough to break the rate back convincingly under the 1.5700 handle. Traders complained of very light volume again as was the case in all the pairs. USD/JPY fell to a new daily low at the 107.33 figure but saw some solid bids emerge to lift the rate off the lows; high prints overnight at a new monthly high of 108.08 remained unchallenged in NY trade and traders expect another test to draw out the offers again tonight. For the most part the USD was the victim/beneficiary of non-USD cross spreading which again saw demand for Yen at the highs. Exporters on the offer will likely be seen tonight. About the only USD pair with any upside follow-through from last week today was USD/CAD. Traders note that high prints at 1.0247 included light stops and possible official buying suggesting the rate will try for the 1.0250/80 area before reversing. In my view, the Loonie is at the top of the range and a drop is coming so aggressive traders can sell USD/CAD anytime over the 1.0250 area near-term. I’ll make it an official set-up in the next 24 hours but I like the sell side over the 1.0250 area. In my view, the USD has had a dismal day of non-event trading. Today’s highs/lows cannot be relied on to offer significant data for the coming few days as the volume were so low and the interest non-existent. Traders appear to be waiting for more news later in the week. Expect a quiet overnight session also.

EURO/USD Daily
Resistance 3: 1.5840/50
Resistance 2: 1.5800
Resistance 1: 1.5750/60
Latest New York: 1.5749
Support 1: 1.5670/80
Support 2: 1.5620/30
Support 3: 1.5580 (MAJOR SUPP)

Comments
Early break bought back but whipsaw is on no volume and rate is stuck. Some semi-official selling possible. Stops and short-squeeze by Russian buying this morning; resistance at 1.5750 area holding. SWF’s were selling EURO on the rally last week; need to see them back this week. Close back under the 1.5700 area needed to pressure buying signals or at least postpone them a few days. Lots of two-way action under the 1.5700 handle. Rate continues to track Cable and vice-versa. Stops above the 1.5820 area possibly in range today; stops under the 1.5620/30 area likely in size and enough to test 1.5580 major support. Hold shorts and let it work. Large names on the offer reported into the highs, look for a top to form. Major support at the 1.5580 area and slightly below. The 50 bar MA likely to offer support should the rate fall back but still looking for a test under the 1.5600 area soon.

Data due Tuesday: All times EASTERN (-5 GMT)
All Day EUR German Prelim CPI m/m

USD/JPY Daily
Resistance 3: 108.80
Resistance 2: 108.40/50
Resistance 1: 108.00/10
Latest New York: 107.48
Support 1: 107.20/30
Support 2: 106.80
Support 3: 106.50

Comments
Early dip bought back, rate holds ranges despite an early attempt through the 108.00/10 resistance area. Volumes not that high suggesting more two-way action and bids will support. Rate grinding into offers and a rally may come overnight Monday. Equities continue to drag on the pair but support appears sold on the dip to 106.50 area. Rate is ready to test the size of offers at the 108.00 area and beyond in my view. More stops beyond above 108.50 in large size traders say. Rate likely to attempt more gains if oil drops and equities rally. Exponential reversal signal still valid, expect more two-way action and a test of the highs. Look to cover longs on a rally over the 108.25 area.
Data due Tuesday: All times EASTERN (-5 GMT)
7:50pm JPY Prelim Industrial Production m/m

Analysis by: Forexpros.com- written by Jason Alan Jankovsky

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

[ForexPros]

Today’s US Dollar Trading
• USD rallies hard after US news
• Stops drive a lot of trade
• Volumes larger

Overnight Preview
• Order boards wiped clean so expect consolidation
• Whipsaw likely around US data in the morning

Looking Ahead to Wednesday
All times EASTERN (-5 GMT)
• 8:15am USD ADP Nonfarm Employment Change
• 10:35am USD Crude Oil Inventories
ADP likely to be the big news for the day.

Summary
After a quiet and slow start overnight the USD rallied hard after the release of better-than-expected Consumer Confidence data to post the best levels of the month against most pairs. Although not a closely watched indicator, today’s Consumer data was enough to rally US equities which started the general climb by the USD until stops above the market were elected in size as had been rumored. Perhaps making for a self-fulfilling prophecy, the majors fell back through waves of stops were hit as traders bailed on long positions once news lows for the week were traded. Across the board the USD rallied and held firm after the London fix and into the close with strong volumes available to mark the USD higher. GBP fell through the 1.9840/50 area early in the day and pressured offers resting around the 1.9800 area until the stops were triggered taking the rate to a low print at 1.9759 in the afternoon. Not able to recover as of this writing the rate remains near the lows at 1.9778 area. EURO fell in sympathy as well finding stops at 1.5700, 1.5660, and what appears to be long-liquidation stops at 1.5600 for a low print at key support at 1.5550 area; low print at 1.5552 before bouncing. Post liquidation rallies in all pairs were dismal and the USD appears to have potential to consolidate these gains overnight. USD/JPY rallied past the 108.00 handle for a high print at 108.31 before offers capped the move; traders say exporter offers and long-liquidation selling plus long-term players and semi-official selling made for a hard top; traders expect the USD/JPY to fall back despite the firmness seen elsewhere. Both Swissy and Loonie are topping as well I think and the next 24-48 hours of hard US data likely to increase volatility a bit. Look for the USD to consolidate these gains and perhaps have a bit of two-way trade or early profit taking but if US data is dollar-friendly then the USD may have another leg higher in store near-term. Aggressive traders need to be ready to sell into this rally as the move is at key resistance across the board. The next day or so we will have short trades.

EURO/USD Daily
Resistance 3: 1.5840/50
Resistance 2: 1.5800
Resistance 1: 1.5750/60
Latest New York: 1.5582
Support 1: 1.5550
Support 2: 1.5520/30/30
Support 3: 1.5500

Comments
Low prints at MAJOR support; hard and fast break likely to encourage a round of short covering. Look to re-short later—OK to stay flat a bit as we just took a huge win from the short side. Close back under the 1.5700 area pressures buying signals; not a lot of bids due soon. Rate continues to track Cable and vice-versa. Stops above the 1.5820 area likely back out of range for today after the drop this morning. Stops under the 1.5620/30 area were as expected; now that they are cleared a rotation higher is coming.

Data due Wednesday: All times EASTERN (-5 GMT)
5:00am EUR Consumer Confidence

USD/JPY Daily
Resistance 3: 109.00/10
Resistance 2: 108.80
Resistance 1: 108.40/50
Latest New York: 108.13
Support 1: 107.20/30
Support 2: 106.80
Support 3: 106.50

Comments
Rate finds stops to drive higher but offers are massive traders say. Out of longs with nice gain; ok to reverse and short the rate but I am inclined to wait a day or so. Volumes were higher and suggest a lot of bids trying to score higher action but offers contain them. Equities continue to drag on the pair but close above 108.00 likely to inspire more two-way action. More stops beyond above 108.50 in large size traders say. Rate likely to attempt more gains if oil drops and equities rally. Exponential reversal signal still valid, expect more two-way action and a test of the highs.
Data due Wednesday: All times EASTERN (-5 GMT)
7:15pm JPY Manufacturing PMI

Analysis by: Forexpros.com written by Jason Alan Jankovsky

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

[ForexPros]

Today’s US Dollar Trading
• USD starts mixed then rallies
• USD/CAD rallies to a new high
• Volumes moderate

Overnight Preview
• Likely early follow-on buying of USD
• Should be quiet ahead of FOMC

Looking Ahead to Thursday
All times EASTERN (-5 GMT)
• 10:00am USD ISM Non-Manufacturing Composite
• 2:15pm USD FOMC Statement
• 2:15pm USD Federal Funds Rate

Summary
The USD is higher against most pairs today after a mixed start overnight. A dropping oil market helped the Greenback and the early rally extended after the London fix for USD/CAD and USD/JPY. Both pairs made highs into the end of the trading day surprising most desks with the firmness on the move. The rumored option barrier at 1.0310 area in Loonie fell as stops above got triggered for a high print at 1.0371 as the rate ground through reported offers around the 1.0340/0 area. The rate is now sitting at the highest level it’s been at all year and possibly set to take on a new high. Traders report more offers layered ahead of the 1.0380 through 1.0400 areas so action could get choppy. Stops out of range on the day but just barely; aggressive traders can hold open shorts. USD/JPY also rallied today clearing light stops at the 108.10/20 area for a high print late in the day at 108.30; still technically an inside range day. Traders note offers are remaining thick and exporters are on the offer actively. Additionally, volumes were light on the move suggesting the rate may have had some extra chop due to thin conditions. EURO had a nice rally touching the 1.5620 area before being pushed back; high prints at 1.5632 as oil rallied this morning but once oil fell back the Greenback flew higher taking out light in-range stops set by early longs. Across the board the USD firmed after the London fix, GBP had the lows on the day late in sympathy with EURO most agree; GBP now under the July lows suggesting more weakness on the way. In typical technical fashion the GBP had a lot of interest in cross-rates today with Sterling-Yen and EURO/GBP both having a two-way day. For the most part, today’s USD trading was technical in nature as the USD found close-in stops to help drive action today. On a pre-report day such as tonight/tomorrow more technical trading is expected. Look for the Greenback to remain range bound and sideways; it should get real quiet as the markets brace for FOMC on Tuesday. Market sentiment is for no rate change and no change to the statement. I look for the majors to consolidate for the most part.

GBP/USD Daily Forex Analysis
Resistance 3: 1.9850
Resistance 2: 1.9820/30
Resistance 1: 1.9780
Latest New York: 1.9623
Support 1: 1.9600
Support 2: 1.9550/60
Support 3: 1.9520

Comments
Rate follows EURO higher then lower, finds stops on post-news drop; good bids seen on the dip into 1.9600. Fails to hold early gains on very light volumes. Nothing really happening; some cross trading likely but not a lot of chatter about sterling crosses overnight. Traders report some reserve-manager buying on the dips but also offers capping. Rate is two-way in sympathy with EURO. Possible buying from semi-official names so watch the news. Offers above the market mixed with stops from late shorts so be ready for whipsaw the next few days. Traders expect GBP to track EURO through this week. Continue to expect a lot of cross-trading.
Data due Tuesday: All times EASTERN (-5 GMT)
Tentative GBP Halifax HPI m/m
4:30am GBP Manufacturing Production m/m
4:30am GBP Services PMI
4:30am GBP Industrial Production m/m
7:01pm GBP Nationwide Consumer Confidence
7:01pm GBP NIESR GDP Estimate

EURO/USD Daily Forex Analysis
Resistance 3: 1.5750
Resistance 2: 1.5700/10
Resistance 1: 1.5620/30
Latest New York: 1.5586
Support 1: 1.5540/50
Support 2: 1.5520/30
Support 3: 1.5500

Comments
Rate two-way all day but holds support, rate remains in tight range but toolbox gives a buy signal. Low prints again at MAJOR support. Hard and fast break from US data last week meets with no follow-on selling; likely to encourage a round of short covering next day or two. Look to re-short later; rate feels like it wants to rally off these lows. Aggressive traders can buy this dip for a return to resistance. Continued trade under the 1.5700 area pressures buying signals; “dead cat bounce” is likely today but if volume are there, need to hold a bit. Rate continues to track Cable and vice-versa. Stops above the 1.5820 area likely back out of range for today after the drop last week. Now that stops are cleared a rotation higher is coming.
Data due Tuesday: All times EASTERN (-5 GMT)
4:00am EUR Services PMI (r)
5:00am EUR Retail Sales m/m

Analysis by: Forexpros.com written by Jason Alan Jankovsky

Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.