Daily Analysis Thread

[ForexPros]

Today’s US Dollar Trading

• USD remains range-bound
• Traders see two-way action and stops as the main event today
• Fundamentals being ignored in favor of rhetoric

Overnight Preview

• Look for the USD to back and fill ahead of US news tomorrow
• Expect current ranges to hold

Looking Ahead to Wednesday
All times EASTERN (-4 GMT)
• 7:45am USD FOMC Member Plosser Speaks
• 10:00am USD Pending Home Sales m/m
• 10:35am USD Crude Oil Inventories

Summary
The USD is mixed to end New York after a solid two-way session driven mostly by active buying and selling. Although stops were triggered for part of today’s volatility in most pairs, the majors remained inside established ranges for most of the day. Today’s fundamental news was benign and not market-moving; traders remained focused on how global leaders will attempt to restore confidence to the financial system. Finance leaders today meeting in Luxemburg made a token gesture to guarantee bank deposits up to 50K EURO in the Eurozone but most traders saw that as only a minor step. Most are looking toward a US Fed rate cut sooner rather than later with some calling for a rate cut this week. The Fed increased the lending window using the TAF program to include more potential securities or collateral but the markets appear heavily focused on a rate cut by the Fed as well as other Central Banks. While waiting for that to happen the major pairs remained whippy inside established ranges and remained two-way all day. GBP rose to a high print at 1.7660 in early trade before backing off to the 1.7500 area and slightly below; traders note stops both ways during the day. EURO rallied in sympathy with Cable for a high print at 1.3744 before falling back as well; traders note that the lows of 1.3479 are a technical low suggesting that the larger range today off the lows may be a near-term bottom. In my view, the USD is severely over-bought near-term and a long-liquidation break is likely soon. I like buying the EURO and the GBP on dips and the markets should give us at least one try this week. USD/JPY whipsawed all day first making highs overnight at 103.30 before dropping back to trade under the 101.70 area; the rate rallied hard on news that the RBA had cut rates but sellers were active at the highs. In the USD/JPY the threat of a coordinated rate cut scenario by the three largest CB’s is keeping the Yen well-bid; traders expect more losses by the USD/JPY near-term. In my view, the USD is setting up for a break lower—keep vigilant and be ready to move on further USD strength.

GBP/USD Daily

Resistance 3: 1.8180
Resistance 2: 1.8050
Resistance 1: 1.7880
Latest New York: 1.7493
Support 1: 1.7310/20
Support 2: 1.7280

Comments

Rate is two-way on the way down to trade under support around the 1.7300 area; volumes better and traders note large names on the bid possibly covering shorts. Rate is likely heavily over-sold. Follow-on selling likely to attract short-covering on further weakness. Follow-on selling likely from technical’s and spillover from EURO. Aggressive traders can buy this dip around the 1.7380 area; look for a recovery back to the 1.8000 handle near term. Two-way action likely near-term; heavy focus on bailout plan. Possible sovereign interest on the dip as semi-officials seen on dips in both EURO and GBP recently. Some stops triggered along with active selling; traders note profit-taking bids. Major support has held for two weeks now, any weakness likely to be bought hard. OK to buy any time in my view. Let price orders work near-term.
Data due Wednesday: All times EASTERN (-4 GMT)
Tentative GBP Halifax HPI m/m
5:30am GBP BRC Shop Price Index y/y
10:30am GBP CB Leading Index m/m

EURO/USD Daily

Resistance 3: 1.3900/10
Resistance 2: 1.3880
Resistance 1: 1.3800/10
Latest New York: 1.3623
Support 1: 1.3480
Support 2: 1.3440


Rate has inside range day but rallies on news of potential rate cut; OK to look at the buy side on weakness to the bottom of the range. Pullback to the 1.3400 handle on lighter volume. Rate is an absolute screaming buy in my view. Aggressive traders can buy anytime under the 1.3900 handle in my view. Traders note stops triggered on the way down along with technical selling. Oil weaker helps pressure also. Traders note stops building above the market but those likely remain out of range today. Expect more two-way action with upside bias; traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market. Traders suggesting that the rate is continuing to trade technically. A bottom is due soon but the question is where.
Data due Wednesday: All times EASTERN (-4 GMT)
2:45am EUR French Government Budget Balance
2:45am EUR French Trade Balance
6:00am EUR German Industrial Production m/m

Support 3: 1.3400

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.

[Mennon]

Such good theme also has no continuation ((

[ForexPros]

Today’s US Dollar Trading

• USD has a technical day, holds S/R
• Volumes continue to remain off
• Traders remain unsure how to play the bailout

Overnight Preview
• Look for continued two-way trade
• Economic news tomorrow may encourage some USD selling

Looking Ahead to Wednesday
All times EASTERN (-4 GMT)
• 8:30am USD Core Retail Sales m/m
• 8:30am USD PPI m/m
• 8:30am USD Retail Sales m/m
• 8:30am USD Core PPI m/m
• 8:30am USD Empire State Manufacturing Index
• 10:00am USD Business Inventories m/m
• 1:15pm USD Fed Chairman Bernanke Speaks
• 2:00pm USD Beige Book

Summary
The USD had a uneventful day of mostly technical trade with only the USD/JPY stretching outside established overnight ranges to the downside and USD/CAD suffering a rally to the upside. Most pairs made early highs or lows on the news of additional government-sponsored bailout options provided by the US and other G-7 nations as the prop of the financial system continues to remain center-stage. With additional economic news due tomorrow expected to be USD bearish, it is likely that traders will see a bit of long-liquidation in the USD but the fact is most sentiment remains supportive of the USD near-term. Traders are expecting more two-way action similar to today’s trade at least through the end of the week. Aggressive traders will likely have the more short-term opportunity as the majors are likely to cover the same ground twice the next few days. Although initial reaction to the G-7 support was USD bearish the majors have not seen an increase in volumes and order-flow has been patchy some desks report. In my view, the majors will continue grinding sideways in a broader range the next few days as details begin to emerge that might break the Greenback one way or the other. GBP fell back from an early high at 1.7634 to trade back under the 1.7500 handle into the close. Traders note a lack of fresh buying after a round of short-covering lifted the rate in early trade. Cross-spreaders for Yen appear active again and a dip into the 1.7300 handle might be a buying opportunity near-term. EURO dipped a bit in sympathy as traders saw solid offers appear on the move to the 1.3700 handle; most desks are looking for a pullback to the 1.3500 area soon although good bids were seen around the 1.3620/30 area and above today. USD/JPY held near the 103.00 handle for most of the morning then began to slide off as equities retreated from their early gains. Most desks report that the volumes were light on the rally suggesting a “dead cat bounce’ may be developing in the rate. Low prints in late New York at 101.49 no doubt left the late longs stinging. USD/CHF failed to extend gains past the recent highs around the 1.1400 area; high prints at 1.1388 were turned back to close around the 1.1320 area. USD/CAD bounced higher after the 8-figure slide from Friday’s highs to trade the 1.1600 handle into the close; again traders have no reason to support such a move other than continued panic buying of USD by someone. Look for the rate to remain volatile. In my view, the whippy nature of the majors underscores the current lack of confidence traders continue to operate under. With a rally in equities fizzling into the close it underscores the lack of real progress made despite the promises of help from the powers that be. Look for the USD to remain two-way again overnight with a slightly higher bias into tomorrow’s news.

GBP/USD Daily

Resistance 3: 1.7720
Resistance 2: 1.7680
Resistance 1: 1.7630/40
Latest New York: 1.7438
Support 1: 1.7440
Support 2: 1.7380
Support 3: 1.7300
Comments
Rate falls back after recovery to trade flat; likely to pullback to support around the 1.7380 area for a buy point. Cross-spreading liquidation likely supporting the rate but two-way action adding to volatility. New Lows around the 1.6800 area likely to draw additional bids and will likely hold on further weakness, traders note quality bids on the dip suggesting a bottom is in here somewhere. A solid close over the 1.7300 handle will likely help the longs. Aggressive traders can look to the buy side again on any dip the next day or so. Volumes lighter after the open. Follow-on selling likely to attract short-covering on further weakness. Follow-on selling likely from technical’s but spillover strength from EURO likely to be better to end the week. Look for a recovery back to the 1.8000 handle near term; two-way action likely to continue. Possible sovereign interest on the dip as semi-officials seen on dips in both EURO and GBP recently. Some stops triggered along with active selling; traders note profit-taking bids. Traders report cross-spreading for Sterling crosses likely driving the rate near-term.
Data due Wednesday: All times EASTERN (-4 GMT)
4:30am GBP Claimant Count Change
4:30am GBP Average Earnings Index y/y
4:30am GBP Unemployment Rate

EURO/USD Daily

Resistance 3: 1.3880
Resistance 2: 1.3820
Resistance 1: 1.3780
Latest New York: 1.3653
Support 1: 1.3580
Support 2: 1.3520
Support 3: 1.3480
Comments
Cross-spreading is mitigating and EURO/JPY is recovering driving support for EURO; bailout plan is likely to fuel recovery. Dip from highs holds technical support and should attract a rotation higher. Two-year low on a Friday likely a bottom near-term. Rate at a buy point, OK to buy the next dip. Aggressive traders can add to open longs on a close over the 1.3700 area. Pullback under the 1.3400 handle this week on lighter volume would be a great buy in my view. Rate is an absolute screaming buy in my view. Aggressive traders can buy anytime under the 1.3900 handle in my view. Traders note stops triggered on the way down along with technical selling. Oil two-way spills over into pricing; weaker oil helps pressure also. Traders note stops building above the market along with offers. Expect more two-way action with upside bias; traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market. Traders suggesting that the rate is continuing to trade technically. Traders note official names on the bid.
Data due Wednesday: All times EASTERN (-4 GMT)
2:00am EUR German Final CPI m/m
5:00am EUR CPI y/y
5:00am EUR Core CPI y/y



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

• Two-way trade after the open
• US data negative but traders still watching credit
• Technical trading finds some stops

Overnight Preview

• Look for some light follow-on buying of USD, then a fade
• Should get quiet ahead of US data

Looking Ahead to Thursday
All times EASTERN (-4 GMT)
• 8:30am USD CPI m/m
• 8:30am USD Unemployment Claims
• 9:00am USD TIC Long-Term Purchases
• 9:15am USD Capacity Utilization Rate
• 9:15am USD Industrial Production m/m
• 10:00am USD Philly Fed Manufacturing Index

Summary
The USD is ending the day mixed today after a solid two-way overnight session last night; holding on to gains against the GBP and EURO and making new highs around the London fix. Traders note that focus remains on the weakness in the financial markets and a 500-plus point drop in the DJIA today didn’t help sentiment despite weak economic data this morning. US data was USD-negative this morning and more is due tomorrow leaving the fundamental picture for the Greenback looking dismal; so why are traders still buying USD today? Some desks suggest that the tide is beginning to turn on that thinking and note that despite the credit-crisis and the liquidity crunch, the major pairs are all being sold for JPY for the most part. If the situation in the US is similar to the situation in Japan during the 1990’s then a sharp devaluation of the currency would be expected. It is hard to argue for a stronger USD long-term if the Fed will be forced to drop rates back down to the 1.0% level or lower in order to attempt a recovery from a recession/depression;; which the US is no doubt on the verge of. Still, USD remains bid against most pairs today with the exception of JPY. GBP high prints at 1.7604 went unchallenged today in New York and at the London fix dropped to new lows; traders note stops triggered along with active selling for a low print in late NY at 1.7298. GBP is very near a technical buy-point in my view after this morning’s failure to hold gains above the 1.7550 area; look for bids around the 1.7250 area overnight to support. EURO followed GBP lower for a low print at 1.3495 and is hovering off the 1.3500 handle in light trade. Volatility is likely a sign of near-term bottoming and I would look for a buy point in EURO on further weakness to the 1.3420/30 area if we get it overnight. USD/JPY fell victim to the weakness on Wall Street today holding its own for most of the day near the opening ranges but unable to show any strength at all in NY; low prints came as the DJIA slide off with current low prints at 100.42 making for a try on weekly lows but finding a bit of support; look for more downside in Asia overnight. USD/CAD continues to baffle traders as a rally through the 1.1850 area topped out at 1.1889; a full three big figures off the lows seen in Asia overnight. Panic trading of the pair likely was augmented by falling oil prices as Crude dropped three bucks to trade at another weekly low. Traders remind that the USD has a significant economic problem to reflect and current pricing is looking very toppy; but until the sentiment turns on the credit crisis the USD will likely suffer more two-way action with lots of volatility. Look for the USD to remain range bound after a try for slightly better highs overnight as tomorrows data is likely to be unfriendly.

GBP/USD Daily

Resistance 3: 1.7720
Resistance 2: 1.7680
Resistance 1: 1.7630/40
Latest New York: 1.7327
Support 1: 1.7300
Support 2: 1.7250/60
Support 3: 1.7220
Comments

Rate firms after fall back yesterday but suffers selling after London; pullback to support around the 1.7380 area challenged and stops found under for lows. Rate at buy zone now but wait for further drop into 1.7250 area. Cross-spreading liquidation likely supporting the rate but two-way action adding to volatility. New Lows last week around the 1.6800 area likely to hold now. Traders note quality bids on the dip suggesting a bottom is in here somewhere. A solid close over the 1.7300 handle has likely helped the longs; expect more buying on dips. Aggressive traders can look to the buy side again on any dip the next day or so. Follow-on selling likely from technical’s but spillover strength from EURO likely to be better to end the week. Look for a recovery back to the 1.8000 handle near term; two-way action likely to continue. Confirmed sovereign interest on the dip last night as semi-officials seen on dips in both EURO and GBP recently. Traders report cross-spreading for Sterling crosses likely driving the rate near-term.
Data due Thursday: All times EASTERN (-4 GMT)
NONE

EURO/USD Daily


Resistance 3: 1.3880
Resistance 2: 1.3820
Resistance 1: 1.3780
Latest New York: 1.3507
Support 1: 1.3500
Support 2: 1.3480
Support 3: 1.3450
Comments

Cross-spreading is mitigating and EURO/JPY is recovering driving support for EURO; bailout plan is likely to fuel recovery. Dip from highs holds technical support and should attract a rotation higher. Two-year low on a Friday likely a bottom near-term. Rate at a buy point after latest attempt higher; OK to buy the next dip. Pullback under the 1.3500 handle likely to attract bids as further dip was bought aggressively last time. Rate is an absolute screaming buy in my view. Aggressive traders can buy anytime under the 1.3900 handle in my view but be ready for continued two-way action ahead of a rally. Oil two-way spills over into pricing but rate firm despite lower oil. Traders note stops building above the market along with offers. Expect more two-way action with upside bias; traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market. Traders suggesting that the rate is continuing to trade technically. Traders note official names on the bid.
Data due Thursday: All times EASTERN (-4 GMT)
4:00am EUR Italian Trade Balance

Join us for the Afternoon US Dollar Wrap-Up daily at 3:15 pm Central/Chicago time (GMT -6)


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.

[Mennon]

USD-CAD
Preferred view is for a fall to below 1.1712 while 1.1783 - 1.1854 area resists. A clear break of 1.1925 would be bullish.

[ForexPros]

Today’s US Dollar Trading

• GBP drops to 2008 lows; EURO makes new 2008 lows
• Technicians suggest over-sold conditions brewing

Overnight Preview

• Look for majors to hold ranges
• Light economic news

Looking Ahead to Wednesday
All times EASTERN (-4 GMT)
• 10:35am USD Crude Oil Inventories
Economic news continues light today for everyone
The USD continued to advance against the majors today as stops under recent lows were triggered in thin trade; traders note two-way trade early overnight gave way to additional risk-aversion trade as desks reported USD buy-side interest into the London fix. After the noon hour traders note that the majors continued to drift lower as sell-orders and stops continued to pressure EURO and GBP into lows. Equities were under pressure after an early rally failed and USD/JPY dropped to new lows as exporters and Japanese lifers were seen on the offer late European trade and early New York. Semi-official names and sovereigns were on the bid for EURO and GBP early traders say but support evaporated as the day went on. EURO dropped to a low print of 1.3077 before profit-taking bids lifted the rate back over the 1.3140 area; again traders report thin conditions. GBP dropped to the 1.6800 handle for a low print at 1.6835 in late New York action and the 2008 lows are now under threat; technicians are targeting the next layer of support in GBP at the 1.6750 area. USD/JPY dropped to the 100.15 area before a late rally in equities lifted the rate back to the 100.80 area. Traders note that both Swissy and Loonie extended their respective ranges higher but sellers were active on the rally and both rates dropped back into the close a bit. Most pairs have completed technical objectives analysts say and are showing signs of oversold conditions suggesting that the USD may be finally due for a correction. In my view, the USD is overdue for a correction and now that the credit crisis may be showing signs of resolution the Greenback may fall back quickly; especially if economic news is unfriendly to end the week. Tomorrow is a light day for news but later in the week Existing home sales will likely show another decline. Regardless of near-term sentiment the USD has horrible fundamentals underlying current action; I am still looking for the USD to fall back to end the year. Tomorrow will likely be a day of technical trade as the calendar is again light; look for the majors to hold existing ranges.

GBP/USD Daily


Resistance 3: 1.7380
Resistance 2: 1.7320
Resistance 1: 1.7250
Latest New York: 1.6707
Support 1: 1.6700/10
Support 2: 1.6650/60
Support 3: 1.6600
Comments

New low late trade today; pressured lower from stops and general technical selling. Light UK data no help overnight; traders note middle-eastern names on the bid as the rate drops. Today’s action again very two-way; stops under the lows drive trade also. Drop under psychological support at 1.7000 challenged again. Rate at buy zone now but range appears wider. Drop under the 1.7200 handle finds light stops. Monthly lows give way as sentiment won’t rally. Traders note quality bids on the dip suggesting a bottom is in here somewhere. Aggressive traders can buy under 1.7000 area but expect more whippy action. Follow-on selling likely from technical’s but spillover strength from EURO likely to be better to end the week. Look for a recovery back to the 1.8000 handle near term; two-way action likely to continue. Confirmed sovereign interest on the dip last night as semi-officials seen on dips in both EURO and GBP recently. Traders report cross-spreading for Sterling crosses likely driving the rate near-term.
Data due Wednesday: All times EASTERN (-4 GMT)
4:30am GBP MPC Meeting Minutes

EURO/USD Daily

Resistance 3: 1.3500/10
Resistance 2: 1.3450
Resistance 1: 1.3380
Latest New York: 1.3060
Support 1: 1.3050
Support 2: 1.3000
Support 3: 1.2950/60
Comments

More lows late New York; stops drive trade into next technical support. Option barriers reported on the dip. Official interest noted traders say around the 1.3250 area on the break with stops driving the dip lower. OK to look to the buy side now; rotation off the lows to hold above 1.3350 suggests a near-term bottom. Rate is an absolute screaming buy in my view—I can’t see further weakness being ignored by the buyers. Oil two-way spills over into pricing but rate firm despite lower oil. Traders note stops building above the market along with offers. Expect more two-way action with upside bias; traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market. Traders suggesting that the rate is continuing to trade technically. Traders note official names overnight this time.
Data due Wednesday: All times EASTERN (-4 GMT)
4:00am EUR Italian Retail Sales m/m


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.

[sam111]

Hello friends i have visited the site forexpros.com it is the acurate site for news and to know about technical and fundamental analysis. Apart of it you get the news of commodities and shares as well.

[ForexPros]

Today’s US Dollar Trading

• Traders note volumes and conditions at almost zero
• Stops drive a lot of the majors lower
• USD/JPY into the 97.00 area

Overnight Preview

• Look for consolidation and a quiet night
• USD likely to be sideways ahead of data

Looking Ahead to Thursday
All times EASTERN (-4 GMT)
• 8:30am USD Unemployment Claims
• 10:00am USD HPI m/m
• 10:35am USD Natural Gas Storage

Summary
The USD continued to advance against most majors but lost ground against Yen to end the day mixed and at new highs for the year. Stops were triggered in thin trade traders report suggesting that some bottom-picking has been done recently but the relentless one-way USD advance today made quick work of the USD bears today. Traders report that conditions were horrible and volumes almost non-existent suggesting that a potential bottom is once again forming. With most traders focusing almost exclusively on liquidity, bank lending and the financial crisis, it appears evident that finding a USD bear will be hard work. In my view, the charge higher by the USD is suspect because it can’t last due to the underlying fundamentals being what they are. Lately traders have ignored US economic data preferring to trade on rumor and conjecture; tomorrow is regular unemployment and Friday is Existing home sales; both expected to be negative for the Greenback. On the day, Cable sank like a stone for a low print at 1.6138 after the London fix as more dovish rhetoric from the BOE filtered through the markets. Traders note that order boards are blank after the 500 point move overnight and the 1200 point move the past 48 hours; most are looking for a bounce to at least hang a hat on. EURO likely fell in sympathy although some suggest the EURO led the decline; either way the EURO dropped through the 1.3000 handle for a low print at 1.2737 before a bounce was seen. Traders report model accounts selling the rate under the 1.2900 area. USD/CHF rallied also for a high print at 1.1714 in NY before falling back on profit-taking; mist expect a test for stops again over the 1.1720 area near-term and that may finally be the sell for a potential top. USD/JPY fell in line with equities weakness; the DJIA losing 460 points on the day heading into the close. Low prints in USD/JPY at 97.29; aggressive traders can sell more on the close at the 97.50 area. In my view, the USD rally has got to be nearing the end of this move; fundamentals don’t support it and the financial crisis is showing signs of mitigating as some banks are returning to normal operations. Once USD bulls figure out they are holding expensive USD I think at least a small correction will force a top in the rate. Look for quiet overnight action as volumes are light and a steady open in NY tomorrow ahead of US data.
GBP/USD Daily

Resistance 3: 1.6800
Resistance 2: 1.6730
Resistance 1: 1.6500
Latest New York: 1.6234
Support 1: 1.6130
Support 2: ?
Support 3: ?

Comments

Follow-on selling surprises to the downside; stops cleared and orders thin. Traders note solid bids but offers remain. Rate at new support level but ranges appears wider. Drop under the 1.6500 handle finds light stops. Monthly lows give way as sentiment won’t rally. Traders note quality bids on the dip suggesting a bottom is in here somewhere. Aggressive traders can buy anytime but expect more whippy action. Follow-on selling likely from technical’s but spillover strength from EURO likely to be better to end the week. Look for a recovery back to the 1.8000 handle near term; two-way action likely to continue. Confirmed sovereign interest on the dip last night as semi-officials seen on dips in both EURO and GBP recently. Traders report cross-spreading for Sterling crosses likely driving the rate near-term. Model accounts seen selling GBP and EURO overnight.
Data due Thursday: All times EASTERN (-4 GMT)
4:30am GBP Retail Sales m/m
4:30am GBP BBA Mortgage Approvals
Tentative GBP MPC Member Gieve Speaks

EURO/USD Daily


Resistance 3: 1.3300
Resistance 2: 1.3120/30
Resistance 1: 1.3060
Latest New York: 1.2832
Support 1: 1.2735
Support 2: 1.2660
Support 3: ?

Comments

More lows overnight; stops drive trade into next technical support. After all is done today the rate is unchanged from US opens. Option barriers reported on the dip but those are cleared. Model accounts seen selling the rate under the 1.2800 area. Official interest noted traders say but rate continued to sell-off. OK to look to the buy side now; rotation off the lows will likely signal a near-term bottom. Rate is an absolute screaming buy in my view—I can’t see further weakness being ignored by the buyers. Oil two-way spills over into pricing and if oil rallies it might take EURO with it. Traders note stops building above the market along with offers. Expect more two-way action with upside bias; traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market. Traders suggesting that the rate is continuing to trade technically. Traders note official names overnight this time.
Data due Thursday: All times EASTERN (-4 GMT)
2:45am EUR French Consumer Spending m/m
4:00am EUR Current Account
5:00am EUR Industrial New Orders m/m
9:00am EUR Belgium NBB Business Climate
Join us for the Afternoon US Dollar Wrap-Up daily at 3:15 pm Central/Chicago time (GMT -6)

Analysis by: Forex | Forex Trading | Currency Trading | Forex Brokers - 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.A

[ForexPros]

Today’s US Dollar Trading

• USD falls back for the most part
• Volumes a bit better late
• Traders note a correction is likely

Overnight Preview

• Look for more weakness near-term
• USD likely to correct on good volume as equities rally

Looking Ahead to Wednesday
All times EASTERN (-4 GMT)
• 8:30am USD Core Durable Goods Orders m/m
• 8:30am USD Durable Goods Orders m/m
• 10:35am USD Crude Oil Inventories
• 2:15pm USD FOMC Statement
• 2:15pm USD Federal Funds Rate

Summary
The USD is two-way into the New York close as traders continue to fear global recession and potential intervention from our trading partners. Rumors that the BOJ was ready to sell Yen to stop the recent sharp rally against most major pairs helped the USD score gains against the Yen but the potential correction has likely run its course and sellers of the rate will return near-term once the US FOMC releases the latest interest rate policy tomorrow; traders feel that the recent volatility in the majors has likely run its course near term as volumes begin to show signs of improving. Rallies in most of the worlds equity bourses certainly helped the majors but there is concern that the equities markets can’t hold gains as a “sell the rallies” sentiment continues to offer sellers in the indexes. In my view, the USD is likely due for a correction lower and I would look for the majors to rally through the end of the week making this month a consolidation month after the recent strength in the Greenback. For the day the GBP had a high print in New York trade at 1.5831 finding stops and solid buying off the overnight lows seen in early Asia overnight. Traders note that stops were about where expected after the recent sell-off. EURO also rallied for a high print at 1.2628 in late New York trade; although both rates were inside ranges it clearly shows the majors are under upward bias near-term. USD/JPY sold off overnight on follow-through for a low print at 92.47 before a rally brought new buying; high prints at 97.79 into late New York. In my view, it should be apparent that the USD is overbought and due for a correction. Look for the Greenback to weaken through the end of the week. It is likely that the market is voting positively to an FOMC rate cut tomorrow; likely to be followed by more rate cuts from our partners as well. Look for the USD to continue lower by the end of the week.
GBP/USD Daily

Resistance 3: ?
Resistance 2: ?
Resistance 1: 1.6330
Latest New York: 1.5859
Support 1: 1.5400
Support 2: 1.5250
Support 3: ?

Comments

Volatility decreases a bit as today is another inside range day but trading higher. Traders note stops and unwinding of cross-spreads supporting the rate. Follow-on selling finds bids at prior low. Bounce off the lows yesterday and today leaves a healthy bid wick suggesting some upside coming soon but volatility is still high. Traders note liquidity is still thin. Rate at new support level but ranges appears wider. Traders note quality bids on the dip suggesting a bottom is in here somewhere but buyers have been stepping up for 1000 points now; many likely sidelined. Aggressive traders can buy anytime but expect more whippy action. Two-way action likely to continue. Confirmed sovereign interest on the dip last night as semi-officials seen on dips in both EURO and GBP recently; lately middle-east names. Traders report cross-spreading for Sterling crosses likely driving the rate near-term.
Data due Wednesday: All times EASTERN (-4 GMT)
5:30am GBP Net Lending to Individuals m/m
5:30am GBP Mortgage Approvals
2:00pm GBP MPC Member Blanchflower Speaks

EURO/USD Daily

Resistance 3: 1.3050
Resistance 2: 1.3000/10
Resistance 1: 1.2800
Latest New York: 1.2646
Support 1: 1.2330
Support 2: ?
Support 3: ?

Comments

More lows overnight; but buyers show up. Hook reversal showing from the toolbox today suggests aggressive traders can buy the rate soon. Rate possibly getting spillover effect from GBP. Overnight news shows inflation not as bad as expected also helping to lift the rate a bit. Support possibly from option trades; but those are cleared. Official interest noted traders say but rate continued to sell-off. Rate is an absolute screaming buy in my view—I can’t see further weakness being ignored by the buyers but conditions are not right I think; possibly overnight tonight into Wednesday. Oil pressure likely spills over into pricing and if oil rallies it might take EURO with it. Traders note stops building above the market along with offers. Expect more two-way action with upside bias; traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market.
Data due Wednesday: All times EASTERN (-4 GMT)
All Day EUR German Prelim CPI m/m

Join us for the Afternoon US Dollar Wrap-Up daily at 3:15 pm Central/Chicago time (GMT -6)

Analysis by: Forex | Forex Trading | Currency Trading | Forex Brokers - Written by Jason Alan Jankovsky

Comments
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 ends lower after starting weaker in Asia overnight
• Fed cuts rates as expected but only 50 BP
• Equities firm but two-way lending pressure to the majors.

Overnight Preview

• Look for the USD to trade sideways
• Should be quiet ahead of US data in the morning

Looking Ahead to Thursday
All times EASTERN (-4 GMT)
• 8:30am USD Advance GDP q/q
• 8:30am USD Advance GDP Price Index q/q
• 8:30am USD FOMC Member Kroszner Speaks
• 8:30am USD Unemployment Claims
• 10:35am USD Natural Gas Storage

Summary

The USD ended the day weaker across the board but intraday volatility and whipsaw kept traders on their toes; most traders noting that large order to sell USD were moving through the markets and thin conditions exaggerated the moves. Most desks report that stops and aggressive long-liquidation hit most pairs to drive prices lower across the board; USD/CAD took a major hit dropping over 400 points for a low print at 1.2124 before a bit of short-covering brought the rate back to the 1.2200 handle. Conditions were thin as expected and some traders report that firmer oil prices help support the Loonie and EURO today. EURO almost traded 1.3000 today with a high print at 1.2993 before dropping back as volatility dropped the rate back under the 1.2800 handle briefly. Traders note that fears of a global slowdown plus intervention to slow down the rise of the Yen helped underpin the rate but all eyes were on the US FOMC rate announcement today. As expected the Fed cut rates but the markets were expecting more than a 50 BP cut today; some desks report that the USD was “disappointed” that the cut wasn’t larger but fed watchers note this leaves room for the Fed to cut more later if needed and helps the recovery in equities. Although the DJIA has had a two-way session and will close with only slight gains; after yesterdays massive move the market likely needs to pause for a day or two and get more information before extending the recovery if that is in the works. In my view, the Majors are beginning to show signs that the bottom is in near-term but the volatile nature and thin conditions in recent trade likely mean we will cover a lot of the same ground twice. I would look for a pullback in EURO and GBP to buy and certainly sell rallies in the USD pairs. For the day, GBP performed the best crossing the 1.6400 handle and closing firm on the day. Traders note that liquidation of Yen cross-trades likely supporting most pairs leaving the USD in a corrective mode to end the week. Look for a quiet overnight session ahead of US GDP data in the morning. Most traders are expecting a “recession-like” number so expect more downside from the USD to end the week.
GBP/USD Daily


Resistance 3: 1.6650
Resistance 2: 1.6580
Resistance 1: 1.6500
Latest New York: 1.6400
Support 1: 1.5400
Support 2: 1.5250
Support 3: ?
Comments

Upside finds stops, volatility decreases a bit as today as market extends range in good two-way trade. Traders note stops and unwinding of cross-spreads supporting the rate. Follow-on selling finds bids at prior low. Bounce off the lows early in the week leaves a healthy bid wick suggesting some upside coming. Traders note liquidity is still thin. Rate at new resistance level but ranges appears wider. Traders note quality bids on the dip suggesting a bottom is in finally but expect volatility. Aggressive traders can buy anytime on weakness but expect more whippy action. Two-way action likely to continue. Confirmed sovereign interest on the dip as semi-officials seen on dips in both EURO and GBP recently; lately middle-east names. Traders report cross-spreading for Sterling/JPY lifting the rate.
Data due Thursday: All times EASTERN (-4 GMT)
3:00am GBP Nationwide HPI m/m
8:01pm GBP GfK Consumer Confidence

EURO/USD Daily

Resistance 3: 1.3100
Resistance 2: 1.3050
Resistance 1: 1.300/10
Latest New York: 1.2957
Support 1: 1.2330
Support 2: ?
Support 3: ?
Comments

Rate begins to rally as ranges extend a bit to the upside; hook reversal showing from the toolbox suggests aggressive traders can buy the rate on dips. Rate possibly getting spillover effect from GBP. Overnight equities stronger also helping to lift the rate a bit. Support also from cross-spreaders as they unwind Yen. Official interest noted traders say. Rate is an absolute screaming buy in my view—I can’t see further weakness being ignored by the buyers; conditions are almost right to buy on the net pullback. Oil pressure likely spills over into pricing and if oil rallies it might take EURO with it. Traders note stops building above the market along with offers. Expect more two-way action with upside bias; traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market.
Data due Thursday: All times EASTERN (-4 GMT)
4:55am EUR German Unemployment Change
6:00am EUR Consumer Confidence

Join us for the Afternoon US Dollar Wrap-Up daily at 3:15 pm Central/Chicago time (GMT -6)

Analysis by: Forex | Forex Trading | Currency Trading | Forex Brokers - 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.