Today�s US Dollar Trading
� USD finds stops above yesterday�s highs
� Holds gains into the close
� Volumes on the lighter side
Overnight Preview
� Look for the USD to retrace a bit
� Quiet ahead of the rate announcements
Looking Ahead
All times EASTERN (-5 GMT)
� 8:30am USD Unemployment Claims
� 10:00am USD Pending Home Sales m/m
� 10:35am USD Natural Gas Storage
� 3:00pm USD Consumer Credit m/m
Rate announcements due from overseas also, could be a big day for the USD.
Summary
On a day with no economic news the USD has advanced and held gains after starting weaker in Asia overnight. Traders note that volumes were low-to modest and the expected volatility from breaching areas of known large stops was minimal. After scoring a new high at 108.60 in early New York the USD/JPY continued to advance as light stops were triggered absorbing offers layered to the 109.10 area. Once over the 109.10 area the market became quiet but ground higher as US equities remained firm and oil continued under pressure. Analysts are skeptical that the USD can continue to advance without solid economic news as the underlying fundamentals are still negative for the Greenback but traders say they are seeing solid bids on a regular basis today. Technical factors in Yen suggest the rate will challenge the 2008 highs around the 110.80 area but in my view that is a tough call without some help from the fundamental front. I personally think the advance is due to correct and the USD will give back these gains but so far today the USD remains firm. GBP has fallen to a low print at 1.9465 and attracted good bids but has not been able to recover as of yet despite the EURO putting on some weight after the break in that pair stalled at 1.5397. Both pairs have fallen hard the past three days and a rotation higher is due soon especially ahead of the ECB and BOE rate announcements out tomorrow; a round of profit taking by the shorts would be a reasonable expectation for tomorrow. USD/CAD has also rallied to a high print at 1.0491 before dropping back to the 1.0450 area suggesting the top is near in that pair as well; traders report model and macro accounts buying USD against offers from semi-official and sovereign names. On the day, the USD�s advance might not be as solid as some expect. Volumes have been on the lighter side and traders have reported �smarter� names and real money on the offer into the highs. Look for the USD to give back some of these gains the next 24 hours; tomorrow�s rate announcements might be the catalyst for a retracement.
GBP/USD Daily
Resistance 3: 1.9620
Resistance 2: 1.9600
Resistance 1: 1.9550
Latest New York: 1.9470
Support 1: 1.9450/60
Support 2: 1.9410/20
Support 3: 1.9380
Comments
Rate goes two-way overnight, follows EURO lower. Good buying seen from large names at 1.9550 area the past 24 hours. Fails to hold early gains on lighter volumes. Rate has likely flushed out weak early longs and shorts will likely take gains soon leaving the rate vulnerable to a rally. 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 Thursday: All times EASTERN (-5 GMT)
Tentative GBP Halifax HPI m/m
Tentative GBP MPC Rate Statement
7:00am GBP Official Bank Rate
EURO/USD Daily
Resistance 3: 1.5680
Resistance 2: 1.5620
Resistance 1: 1.5580
Latest New York: 1.5408
Support 1: 1.5400
Support 2: 1.5380
Support 3: 1.5350
Comments
Rate dips further into support at 1.5400; volumes only moderate with larger names buying traders say. Likely the rate has flushed early longs. Macro accounts seen selling on the break suggesting the rate will find a bottom soon around current levels. Rate feels like it wants to rally off these lows. Aggressive traders can buy this dip for a return to resistance although we were stopped out of first attempt at a long. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming.
Data due Thursday: All times EASTERN (-5 GMT)
2:00am EUR German Trade Balance
2:45am EUR French Trade Balance
4:00am EUR Italian Industrial Production m/m
6:00am EUR German Industrial Production m/m
7:45am EUR Minimum Bid Rate
8:30am EUR ECB Press Conference
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.
Today�s US Dollar Trading
� USD ends mixed-to-weaker
� Official names selling rallies
� Majors ready to rally
Overnight Preview
� Look for more consolidation with a lower boas
Looking Ahead to Wednesday
All times EASTERN (-5 GMT)
� 8:30am USD Core Retail Sales m/m
� 8:30am USD Retail Sales m/m
� 8:30am USD Import Price Index m/m
� 10:00am USD Business Inventories m/m
� 10:35am USD Crude Oil Inventories
Summary
The USD ends today mixed after running stops in both directions today; whippy conditions and thinner volumes helped the Greenback to see some volatility today. Initially better on the day and into European closes the USD reversed today against Yen and EURO but held firm against GBP and Swissy. Although the sentiment is for further USD gains most traders are reporting the recent rally may have run its course for now and with more potentially negative USD news due the next few days some traders are seeing profit taking on the sell side today. Rumors of Russian bids and Swiss bids in EURO helped to underpin that rate with the pair making highs in early New York after the release of better Balance of trade data today. Rallying to a high print at 1.4966 the rate was able to hold gains through the day despite some selling pressure spillover from GBP. Cable was unable to hold gains at all today slipping to the 1.8980 area into the close after holding above the 1.9000 handle most of the day; traders note cross-spreading was likely contributing to the weakness in GBP. USD/JPY finally saw the offers take control of the market as stops were triggered under the 109.50 area for low prints late in the day at 109.28; earlier rallies above the 110.00 handle were turned back after several attempts to make highs and now the rate appears to have topped. USD/CHF is in a similar situation but has managed to hold a bit firmer but still off the highs at 1.0928; looks like a close at 1.0860 area is in the works. On the day the USD is looking weaker and I expect a bit more downside with volatility to result; there are a lot of people with the �buy the dip� mentality waiting for a technical pullback; in my view the USD is setting up for sharply lower prices near term.
GBP/USD Weekly
Resistance 3: 1.9220
Resistance 2: 1.9180
Resistance 1: 1.9150
Latest New York: 1.8966
Support 1: 1.8960
Support 2: 1.8920
Support 3: 1.8900
Comments
Rate falls back in sympathy with EURO; makes lows late in the day while other pairs hold firm suggesting cross-spreading and whipsaw. Rate is under pressure from stops under 1.9000 initially despite higher CPI. Volumes lighter into the lows. Technical buying seen from some desks, buying seen from semi-official names last week and likely more this week. Rate has likely flushed out every long now and shorts will likely take gains soon leaving the rate vulnerable to a sharp rally. 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 Wednesday: All times EASTERN (-5 GMT)
4:30am GBP Claimant Count Change
4:30am GBP Average Earnings Index y/y
4:30am GBP Unemployment Rate
5:30am GBP BOE Inflation Report
EURO/USD Weekly Resistance 3: 1.5000/10
Resistance 2: 1.4980
Resistance 1: 1.4930
Latest New York: 1.4922
Support 1: 1.4800/10
Support 2: 1.4760
Support 3: 1.4720/30
Comments
Net higher day argues for possible short-squeeze. Rate making lows in early trade but then bounces hard, technical selling evident from model accounts traders say suggesting that the rate has finally bottomed. Gap lower has been filled making for a technical buy signal from the lows. Market is heavily short now so expect a rally. Larger names buying traders say. Likely the rate has flushed all longs. Macro accounts seen selling on the break Friday. Aggressive traders can buy this dip for a return to resistance although we were stopped out of first attempt at a long. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.
Data due Wednesday: All times EASTERN (-5 GMT)
5:00am EUR 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.
Today�s US Dollar Trading
� USD whipsaws hard
� Volumes patchy
� GBP falls to new lows
Overnight Preview
� USD likely to consolidate
� Volumes likely to drop ahead of US data tomorrow
Looking Ahead
All times EASTERN (-5 GMT)
� 8:30am USD Core CPI m/m
� 8:30am USD CPI m/m
� 8:30am USD Unemployment Claims
� 10:35am USD Natural Gas Storage
� 2:30pm USD FOMC Member Stern Speaks
Summary
Despite the lack of serious fundamental news the USD whipsawed today taking out stops on both sides today. Initially weaker overnight the Greenback rallied a bit on follow-through buying but ran into ample supply as Yen-crosses dominated trade forcing USD longs to take a breather for a bit. After US data was out the USD rallied against the Yen breaking into stops above the 109.30 area for a high print at 109.75 before dropping back. Most of the USD pairs rallied with the Yen but once stocks declined and oil rallied a bit the luster wore off the Greenback and the majors began to recover. Making a fresh US high late in New York EURO rallied through stops at the 1.4940 area for a return to the higher ranges seen overnight. Traders note that the big stops to protect the shorts start around the 1.4990/1.5000 area and perhaps a little higher. The rate will no doubt make a run for those as EURO now looks like a reversal is in the works. Cable had another break lower as the bears would not quit just yet making a low print at 1.8638; almost a two-year low. With conditions dramatically weaker now in the US than they were in 2006 it makes you wonder where this USD strength is coming from. Most traders are looking for the Greenback to fade near-term and point to the technically oversold readings as a clue that a rally is due. Non-USD crosses for Sterling were also whipsawed suggesting that the market is full of late traders who are likely to get spanked. In my view, this morning�s additional romp higher against GBP as well as the other pairs later in the day is simply evidence of a reactionary market and not an orderly one. Today�s USD data was not favorable to the Greenback and the whipsaw during the day points to a market driven by emotion rather than reflecting market conditions. Once the weak traders are scared out the USD will likely resume a steadier pace of regular depreciation near-term. Look for consolidation tonight and US data to be unfriendly in the morning.
GBP/USD Weekly
Resistance 3: 1.8950
Resistance 2: 1.8900/10
Resistance 1: 1.8880
Latest New York: 1.8707
Support 1: 1.8630
Support 2: 1.8600
Support 3: 1.8580
Comments
Rate falls hard on dovish BOE report; highs ahead of there at 1.9038 suggesting bid interest was there but was panicked. Rate on two-year lows and is an excellent buy in my view. Rate has likely flushed out every long now and shorts will likely take gains soon leaving the rate vulnerable to a sharp rally. 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. Stopped out on new lows, OK to look at the long side again tomorrow
Data due Thursday: All times EASTERN (-5 GMT)
NONE
EURO/USD Weekly
Resistance 3: 1.5050
Resistance 2: 1.5000/10
Resistance 1: 1.4980
Latest New York: 1.4921
Support 1: 1.4800/10
Support 2: 1.4760
Support 3: 1.4720/30
Comments
Rate usually tracking GBP lower but unable to extend losses despite good selling. Russians and Swiss names buying on the dip; inside range day suggests rate is near a bottom. Model accounts selling in EURO and GBP traders say suggesting that the rate is vulnerable to a short squeeze. Market is heavily short now so expect a rally. Larger names buying traders say. Likely the rate has flushed all longs. Macro accounts seen selling on the break Friday. Aggressive traders can buy this dip for a return to resistance although we were stopped out of first attempt at a long. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.
Data due Thursday: All times EASTERN (-5 GMT)
2:00am EUR German Prelim GDP q/q
2:00am EUR German Final CPI m/m
2:45am EUR French Prelim Non-Farm Payrolls q/q
2:45am EUR French Prelim GDP q/q
4:00am EUR ECB Bulletin
5:00am EUR CPI y/y
5:00am EUR Core CPI y/y
5:00am EUR Flash GDP q/q
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.
Overnight Asia/Europe
� Quiet start overnight, USD range-bound
� Volumes lower
� Technical trade dominates due to lack of news
Today�s Economic Reports
All times EASTERN (-5 GMT)
� 1:00pm USD NAHB Housing Market Index
Very light start to the week, light news from overseas as well.
Looking Ahead
All times EASTERN (-5 GMT)
� 8:30am USD Building Permits
� 8:30am USD PPI m/m
� 8:30am USD Core PPI m/m
� 8:30am USD Housing Starts
� 10:00am USD FOMC Member Fisher Speaks
Summary
The USD is mixed to open New York after a relatively quiet start in Asia last night; no real economic news was released leaving the Greenback to trade on mostly technical factors. Now that the panic-buying of USD has largely subsided from late last-week traders are holding the majors in a consolidative pattern to start the week. Normally seen on the bid for EURO during the sharp sell-off recently, major Swiss names seen on the offer overnight around the 1.4650 area traders say; high prints in the rate at 1.4769 in Asian trade. US investment houses seen on the bid this time most likely covering recent shorts; traders note cross-trading for non-USD pairs pressuring EURO as well. Normally following EURO lower but firming today, Cable has held last week�s low so far today with a low print at 1.8624 and the toolbox is flashing an exponential buy this morning. Aggressive traders can buy GBP/USD at the 1.8680 area or better during the day. Tuesday will likely be a big day for both EURO and GBP due to the fundamentals being released making Monday a set-up day. With the heavy selling pressure in both pairs recently a short-squeeze is overdue; in my view getting a position on today ahead of potentially negative news for the USD with corresponding positive news from overseas makes for a good probability of higher EURO and GBP pricing mid-week. USD/JPY is lower making lows under the 110.00 handle in Asia overnight; bids seen from US names traders say as well as importers. The rate is currently holding inside range on light volumes suggesting the rate is still seeing a potential top under the 110.50 area. OK to hold shorts through the day. USD/CAD opened lower and dropped to a 1.0542 low print; if holding shorts you would have added to the rate on the break to 1.0560 area. Currently a bit higher on the day around the 1.0600 handle traders note a lot of technical trade keeping the rate two way to start New York. After taking losses this month, the sucker-rally in the USD appears to be finally faltering putting us in a position to recover during the second half of the month. Look for the USD to weaken during the week but still place stops on open positions; volatility has increased so be protected from whipsaw.
GBP/USD Daily
Resistance 3: 1.8780
Resistance 2: 1.8750/60
Resistance 1: 1.8720/30
Latest New York: 1.8671
Support 1: 1.8620/30
Support 2: 1.8600
Support 3: 1.8580
Comments
After all said and done the rate ends off the lows with a strong buying wick Friday, today�s open shows net bid follow-through. Look for more upside this week. Possibly shorts covering ahead of the news due Tuesday. Rate bouncing off two-year lows and is an excellent buy in my view. Rate has likely flushed out every long now and shorts will likely take gains soon leaving the rate vulnerable to a sharp rally. 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. Get ready for the rally.
Data due Tuesday: All times EASTERN (-5 GMT)
NONE
EURO/USD Daily
Resistance 3: 1.4850
Resistance 2: 1.4820/30
Resistance 1: 1.4770/80
Latest New York: 1.4716
Support 1: 1.4700/10
Support 2: 1.4650/60
Support 3: 1.4620/30
Comments
Stops-driven sell-off scores new low last week but rate bounces smartly suggesting at least a small interest in bottoming. Traders report large bids on the drop, lower oil pricing pressures prices all day. Traders report model/macro accounts continue selling the rate. Traders suggesting that the rate is vulnerable to a short squeeze. Market is heavily short now so expect a rally. Larger names buying last week traders say. Likely the rate has flushed all longs. Aggressive traders can buy this dip for a return to resistance. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.
Data due Tuesday: All times EASTERN (-5 GMT)
2:00am EUR German PPI m/m
5:00am EUR German ZEW Economic Sentiment
5:00am EUR ZEW Economic Sentiment
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.
Today�s US Dollar Trading
� Greenback unable to extend gains
� Volumes light
� Big news out tomorrow may have sidelined traders
Overnight Preview
� Look for two-way action, consolidation
� Possible follow-on selling in Asia to start
Looking Ahead
All times EASTERN (-5 GMT)
� 8:30am USD Building Permits
� 8:30am USD PPI m/m
� 8:30am USD Core PPI m/m
� 8:30am USD Housing Starts
� 10:00am USD FOMC Member Fisher Speaks
Summary Heading into the close for Monday the USD is slightly mixed as pressure from equities rubs a little shine off the bull�s horns; most of the major pairs are slightly lower to about unchanged on the day. Although sentiment remains firm for the Greenback there are signs that the current rally is about to falter; the biggest indicator is low volume in my view. Most pairs had a flurry of activity early ahead of the London fix but have since slowed down measurably from early order flows. Cable is holding firm around the 1.8650 area after making a run for lows but was unable to test the overnight Asia lows still in place at 1.8624; a late rally was turned back from the 1.8680 area and the rate remains steady in the middle of the range. Traders report the GBP is still tracking EURO higher and lower but the EURO remaining firm at the 1.4700 area after a brief spike to fresh New York highs at the 1.4730 area suggest the rate is possibly building for a short-squeeze. EURO has a load of news due tomorrow which is expected to be neutral-to-bearish for the rate so depending on how much downside the rate can manage overnight on the news will likely determine if a run for stops under the 1.4620 area is in store; if holding longs from this morning around the 1.4700 handle is fine for now. Tomorrow�s US data is likely to cause a bit of volatility as well so if the EURO can hold current lows after the news there is a good probability the rate will make a run for high stops likely in the 1.4750 area or higher by mid-week. USD/JPY was under pressure off the highs all day and made new lows for the day at 109.96 but saw a bit of bids show up to hold the 110.00 handle; traders note volumes were thin on the move making for potential volatility near-term. Look for the rate to find stops under the 109.20 area to be in size and a liquidating break to develop if the rate can�t score a new weekly high above the 110.60/70 area; OK to hold shorts for now as well. Loonie came off the lows for the day to trade higher as dropping oil prices continued to attract bids but the rate is showing signs of weakness in my view; OK to hold shorts with stops currently working. In my view, the USD is looking a little �toppy� today and if large bids don�t show up overnight or during the news the Greenback is looking vulnerable for a correction. Look for a quiet overnight session and possibly some follow-on selling to start Asia; the �buy the dip� crowd will likely support the USD overnight so expect some two-way action near-term.
GBP/USD Daily
Resistance 3: 1.8780
Resistance 2: 1.8750/60
Resistance 1: 1.8720/30
Latest New York: 1.8640
Support 1: 1.8620/30
Support 2: 1.8600
Support 3: 1.8580
Comments
Rate struggling to hold gains but is off the weekly low from last week; today�s open shows net bid follow-through but some weakness. Look for more upside this week. Possibly shorts covering ahead of the news due Tuesday. Rate bouncing off two-year lows and is an excellent buy in my view. Rate has likely flushed out every long now and shorts will likely take gains soon leaving the rate vulnerable to a sharp rally. 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. Get ready for the rally.
Data due Tuesday: All times EASTERN (-5 GMT)
NONE
EURO/USD Daily Resistance 3: 1.4850
Resistance 2: 1.4820/30
Resistance 1: 1.4770/80
Latest New York: 1.4695
Support 1: 1.4670
Support 2: 1.4650/60
Support 3: 1.4620/30
Comments
Stops-driven sell-off scores new low last week but rate bounces smartly suggesting at least a small interest in bottoming. Failure to hold above the 1.4700 handle likely to draw in late shorts. Traders report large bids on the drop but volumes died later, lower oil pricing pressures prices all day. Traders report model/macro accounts continue selling the rate. Traders suggesting that the rate is vulnerable to a short squeeze. Market is heavily short now so expect a rally. Larger names buying last week traders say. Likely the rate has flushed all longs. Aggressive traders can buy this dip for a return to resistance. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.
Data due Tuesday: All times EASTERN (-5 GMT)
2:00am EUR German PPI m/m
5:00am EUR German ZEW Economic Sentiment
5:00am EUR ZEW Economic Sentiment
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.
Today�s US Dollar Trading
� USD finally weakens
� Volumes a bit lower
� US news no help
Overnight Preview
� Look for consolidation
� USD likely to have a weaker bias mid-week
Looking Ahead to Wednesday
All times EASTERN (-5 GMT)
� 10:35am USD Crude Oil Inventories
Another light day for the Greenback.
Summary
After showing subtle signs of topping the past few days the USD finally edged lower in thinner trade after the news was out this morning. Although the fundamental picture was a mixed bag with PPI rising and housing still weak the Greenback is not attracting substantial bids as we head into the close. Cable surprised to the upside printing fresh highs for the day at 1.8681 but has since retreated a bit and remains in positive territory. Headline estimates for UK inflation are on the rise and with the expectations for a BOE rate hike sooner rather than later and unless the USD can mount a formidable advance against the cross-spreaders it appears the GBP has bottomed for the month. Aggressive traders can look to buy any weakness the next 24 hours in my view. EURO found light close-in stops above the 1.4740/50 area for a high print at 1.4793 before falling back to hold the 1.4760/70 area; traders say offers for the �sell rallies� crowd were positioned ahead of 1.4800 with large stops above suggesting that if late sellers were in today a test of further offers is likely. German ZEW and PPI data out overnight were supportive of the rate and with light news due for the rest of the week the EURO is likely to trade technically with support now around the 1.4690 area and resistance at the 1.4800 handle. Expect stops from shorts to be rolled down closer to the market likely in the 1.4820 area; expect a short-squeeze to get rolling above that number if we trade there the next 24 hours or so. Market moving data will include Philly Fed on Thursday so between now and then if EURO can�t break back the upside will likely be the course of least resistance. USD/JPY probed for stops as did USD/CHF; both pairs finding some at 109.60 and 1.0950 respectively for low prints on the day at 109.54 and 1.0907. Traders expect more stops at 1.0900 in Swissy and 109.20 in USD/JPY; both numbers likely to trade overnight in my view. The toolbox executed an exponential reversal today so aggressive traders can sell any bounce in USD/CHF. Loonie continues to hold the 1.0600 handle on fears the government will be recalled in Ottawa but the strength is likely only near-term as the rest of the USD-complex is under threat today. Look for the USD to consolidate with a lower bias overnight.
GBP/USD Daily
Resistance 3: 1.8750
Resistance 2: 1.8700/10
Resistance 1: 1.8680
Latest New York: 1.8675
Support 1: 1.8520/30
Support 2: 1.8400
Support 3: 1.8370
Comments Stopped out of longs overnight, rate holding above the lows and showing another large wick. Late highs driven by stops and some active buying; late shorts likely to roll stops close-in. Look for more upside this week. Possibly short covering ahead of the news due Tuesday; some of that may have contributed to the one-figure rally off the lows overnight. Rate bouncing off two-year lows and is an excellent buy in my view. Rate has likely flushed out every long now and shorts will likely take gains soon leaving the rate vulnerable to a sharp rally. Possible buying from semi-official names (Russians) 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. Get ready for the rally.
Data due Wednesday: All times EASTERN (-5 GMT)
4:30am GBP MPC Meeting Minutes
4:30am GBP M4 Money Supply m/m
4:30am GBP Public Sector Net Borrowing
6:00am GBP CBI Industrial Trends Orders
Euro/USD Daily
Resistance 3: 1.4850
Resistance 2: 1.4820/30
Resistance 1: 1.4790/1.4800
Latest New York: 1.4791
Support 1: 1.4620/30
Support 2: 1.4600
Support 3: 1.4570/80
Comments Another stop driven break under the 1.4650 area bought by Russian names traders say; better than expected German ZEW data helps the rate off the lows. Rally over the 1.4750 area likely included some short covering. Today�s US data caused some whipsaw but unable to make new lows. Traders report large bids on the drop but volumes died later. Traders report model/macro accounts continue selling the rate. Traders suggesting that the rate is vulnerable to a short squeeze. Market is heavily short now so expect a rally. Larger names buying last week traders say. Likely the rate has flushed all longs. Aggressive traders can buy this dip for a return to resistance. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.
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.
Today�s US Dollar Forex Trading � The USD unable to hold gains in NY
� Volume a bit better than Friday, stops drive a lot of trade
� Oil pushes Greenback around as do equities
Overnight Preview � Look for tow-way action overnight
� USD may be overextended to the upside so expect downside bias
Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
� 9:00am USD S&P/CS Composite-20 HPI y/y
� 10:00am USD Consumer Confidence Index
� 10:00am USD New Home Sales
� 10:00am USD HPI m/m
� 10:00am USD Richmond Manufacturing Index
� 2:00pm USD FOMC Meeting Minutes
Summary
The USD is weaker against the majors to end New York after starting a bit better overnight Asia. Traders note that volumes were thin overnight and most of the day but once the USD began to move lower after the London fix the volumes increased a bit. The lack of economic news certainly helped with the thinner conditions and today�s Housing Data was no help for the USD bulls even though sales were better-than-expected; after an initial brief rally the USD fell to lows on the day after the release of the news. Cable rallied to a high print at 1.8592 making for a large range on the day and creating a hook reversal but gave back some of those gains to end near the 1.8520 area in slower trade. Earlier stops were under the 1.8500 and 1.8450 area for lows in Asia but professional buying was noted off the lows traders say suggesting that the near-term bottom is in for the rate. EURO fell and rallied in tandem with GBP today but remaining in a tighter range; low prints in Europe at 1.4695 were never challenged in New York and the rate rallied to make highs at 1.4809 before falling back to the 1.4750 area; stops have been triggered at the 1.4750 area on the rallies and on the dips suggesting that the 1.4750 area is the near-term pivot point. Aggressive traders can look to add to their open EURO longs the next 24 hours or so as the two-way action is likely to continue making dips under the 1.4750 area and above the 1.4690 area solid buying opportunities. USD/JPY found stops as expected on a break of the 109.40 area for a low print at 109.01 but the rate was able to recover a bit and close near the 109.30 area. Although the USD is lower and expected to make more lows should additional US data this week remain weak; the USD/JPY needs a significant move under the 108.00 handle for a monthly reversal to form. In my view, the Greenback will likely remain two-way the next several days providing a lot of opportunity for short-term traders. The recent rally in the USD is over-extended I think and a correction is overdue. Look for the USD to remain two-way overnight and into tomorrow�s data.
GBP/USD Daily Resistance 3: 1.8720
Resistance 2: 1.8680
Resistance 1: 1.8620
Latest New York: 1.8515
Support 1: 1.8400/10
Support 2: 1.8350
Support 3: 1.8320
Comments
After all of today�s action the rate ends about where it started this morning after making highs later in the day. Rate falls to a new low overnight but volumes are thin due to the holiday; likely an exhaustion dip and the rate will recover soon. Hook Reversal on the day, look for a bottom the next 48 hours. OK to stand aside but I want to wait just a bit before buying. EURO holding firmer despite a lower open. So far suggesting GBP is overextended. Rumors of a Lehman Brother�s bailout from a Korean source may be blowing over. Close above the 1.8580 area argues for further gains; aggressive traders can buy the close but again I would wait just a bit. Stop-driven break is likely a head fake in my view. 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)
4:30am GBP BBA Mortgage Approvals
EURO/USD Daily
Resistance 3: 1.4880/1.4900
Resistance 2: 1.4850
Resistance 1: 1.4800/10
Latest New York: 1.4748
Support 1: 1.4690/1.4700
Support 2: 1.4650
Support 3: 1.4620
Comments
Although rate is off the highs it is holding firm against the USD. If oil retreats expect a pullback but that is a buying opp in my view. Stops in the 1.4750 area cleared on the way lower but holding above there suggests a �buy the dip� mentality; next level is still above the 1.4900 handle most likely. Support solid in my view at 1.4700 area now; grind in two-way action is good but we want higher volumes on rallies to form this bottom. Traders suggesting that the rate is vulnerable to a short squeeze. Market is heavily short now so expect a rally. Aggressive traders can continue buying this dip for a return to resistance. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.
Data due Tuesday: All times EASTERN (-5 GMT)
2:00am EUR German Consumer Confidence
2:00am EUR German Final GDP q/q
4:00am EUR German Ifo Business Climate Index
4:00am EUR German Ifo Business Expectations Index
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.
Today�s US Dollar Trading
� USD fails to extend overnight strength
� Volumes better
� Stops close-in result in two-way action
Overnight Preview � Look for more two-way action
� USD is getting �tired� I think
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
Summary
To finish today the USD is off its highs against all pairs but still in positive territory against EURO and GBP; traders note that volumes were better today but that might have been due to Oil�s wild ride pulling in smaller day-trading type accounts. Volatility was high earlier when the majors made highs against the USD in the New York session but all the pairs are finishing more in the mid-range making today�s trade a bit more inconclusive. Sentiment is still favoring the USD near-term and with a lighter calendar to end the week the potential for continued two-way trade is higher. As discussed yesterday, short-term accounts have had a lot more opportunity while the longer position accounts have had to hold through whipsaw. EURO is lower and unable to hold the 1.4700 handle after a try earlier in the day; traders note that technicians are expecting a further drop into the low 1.4500 handle soon but in my view, that would be a buying signal. Shorts were seen liquidating on the break and should further declines be in the works look for low-volume drops followed by higher volume rallies soon. Tomorrow�s Oil inventory data likely to cause a bit of volatility in that market which will likely spillover into EURO and GBP. Cable was also unable to hold the 1.8400 handle on the earlier recovery making for a bit more challenging trade in that pair from the long side. Today�s FOMC minutes late in the day was little help for the GBP bulls as a recovery in that pair needs a steady-to-dovish Fed policy and no hints of that were seen in the minutes. USD/JPY continues to grind sideways and under resistance after failing at the highs again today; stops as expected were seen on the dip into New York lows on the day but bids supported at the same previous level making for another round of two-way trade. USD/CAD is looking weaker and lows at 1.0410 are just shy of the reported large stops under the 1.0400 handle. Tomorrow�s Durables data may be enough to drop that rate into stops but the recovery back to the mid-1.04�s shows the bulls are still trying to take control after the large drop last week. In my view, it�s another day of business as usual making the USD bulls a bit more bold. If there is no upside follow-through on durables tomorrow the highs for the week may be in and a correction in the majors can continue.
GBP/USD Daily Resistance 3: 1.8650
Resistance 2: 1.8600
Resistance 1: 1.8530
Latest New York: 1.8391
Support 1: 1.8320
Support 2: 1.8290/1.8300
Support 3: 1.8250
Comments
Big drop in sympathy with EURO, negates hook reversal and stops drive trade. Finishes better than the open so there is some bid interest coming in. Drop is drawing profit-taking bids suggesting the bottom is finally finding a low print. Overdue for a short-covering rally. Likely an exhaustion dip and the rate will recover soon. Look for a bottom the next 48 hours. OK to stand aside but I want to wait just a bit before buying. EURO dropping forced rate into stops traders agree. So far suggesting GBP is overextended. Close back above the 1.8580 area argues for further gains; aggressive traders can buy the close but again I would wait just a bit. Stop-driven break is likely a head fake in my view. 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 Wednesday: All times EASTERN (-4 GMT)
NONE
EURO/USD Daily
Resistance 3: 1.4880/1.4900
Resistance 2: 1.4800
Resistance 1: 1.4760
Latest New York: 1.4648
Support 1: 1.4570
Support 2: 1.4550
Support 3: 1.4520/30
Comments
Rate falls into stops layered close in and accelerates on thinner volumes. Low prints from active selling at 1.4570; rate makes a six-month low and traders report profit-taking bids. Oil retreats also helping to pressure rate, this is a buying opp in my view but we need to wait 24 hours. Traders suggesting that the rate is vulnerable to a short squeeze. Market is heavily short now so expect a rally. Aggressive traders can continue buying this dip for a return to resistance. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.
Data due Wednesday: All times EASTERN (-4 GMT)
2:00am EUR German Import Prices m/m
All Day EUR German Prelim CPI 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.
Today�s US Dollar Trading
� USD whipsaws with conflicting data
� Traders note volumes thin again
� US data inconclusive
Overnight Preview
� Look for more two-way action
� Should get quiet ahead of US data in the morning
Looking Ahead to Thursday
All times EASTERN (-4 GMT)
� 8:30am USD Prelim GDP q/q
� 8:30am USD Unemployment Claims
� 8:30am USD Prelim GDP Price Index q/q
� 10:35am USD Natural Gas Storage
Big day for news with our trading partners, expect some whipsaw.
Summary The Greenback suffered another day of whipsaw today failing to extend recent ranges in thin trade. For the most part, USD traders are looking ahead to more conclusive news due overnight and tomorrow from both our trading partners and here in the US. After failing at highs overnight, the USD managed to recover and try for new highs in most pairs but failing to reach into the zones of reported stops to the upside while traders watched for news on other markets; such as oil and equities. Oil prices managed to whip EURO around making new lows for the US session but failing to reach into real money interest under the 1.4600 handle; overnight lows continued to remain unchallenged in US trade. Holding the 1.4700 area into the close is encouraging to the bulls but the big news will be US GDP tomorrow; traders are looking for a revision upwards but likely will wait for a test of the 1.4600 handle before making a move. GBP continued under pressure with EURO for most of the session moving under the 1.8400 handle to test the low 1.8300�s but volumes are thin traders say. A brief look under the 1.8300 area for a low print at 1.8283 was enough for stops to be triggered but the rate is back in the 1.8330 area into the close suggesting that bids are there but light so far. USD/JPY failed to rally and hold the 110.00 handle again for the 7th day in a row suggesting that offers remain thick at the highs; trades note that tonight�s Japan data may encourage more volatility. Swissy rallied again into the 1.1000 handle but failed late in the day suggesting that offers are thick in that pair also. Aggressive traders can sell above the 1.0980 area for a break lower to end the week. USD/CAD rallied as well but again was unable to attract bids and remained mired in the 1.0400 handle under the zone of offers said to extend into the 1.0530 area for now. In my view, today was just another day of two-way action with the exception of the GBP; look for the USD to fail again overnight and test the bottom of the range ahead of US data in the morning.
GBP/USD Daily
Resistance 3: 1.8650
Resistance 2: 1.8600
Resistance 1: 1.8530
Latest New York: 1.8349
Support 1: 1.8280/90
Support 2: 1.8250
Support 3: 1.8220
Comments
Only pair to fall to a new low but volumes light on the move suggesting overshoot. Rally back in sympathy with EURO. Overnight volumes better traders say; cross-spreaders active in Sterling and EURO suggesting that the USD will be pressured for both pairs near-term. Drop is drawing profit-taking bids suggesting the bottom is finally finding a low print. Overdue for a short-covering rally. Likely an exhaustion dip and the rate will recover soon. Look for a bottom the next 48 hours. OK to stand aside but I want to wait just a bit before buying. So far, two-way trade is suggesting GBP is overextended. Close back above the 1.8580 area argues for further gains; aggressive traders can buy the close but again I would wait just a bit. Stop-driven break is likely a head fake in my view. 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 Thursday: All times EASTERN (-4 GMT)
2:00am GBP Nationwide HPI m/m
6:00am GBP CBI Distributive Trades Realized
7:01pm GBP GfK Consumer Confidence
EURO/USD Daily
Resistance 3: 1.4880/1.4900
Resistance 2: 1.4800
Resistance 1: 1.4760/70
Latest New York: 1.4723
Support 1: 1.4570
Support 2: 1.4550
Support 3: 1.4520/30
Comments Rate bounces back as close-in stops drive trade; remarks from ECB encourage a round of short-covering. If rate can hold above the 1.4750 area on the close good chance of follow-on buying to end the week. EX reversal overnight suggest tie to buy a new dip under the 1.4700 handle (?). Oil firmer likely to help upside, this is a buying opp in my view but we need to wait through US data this morning. Traders suggesting that the rate is vulnerable to a short squeeze. Market is heavily short now so expect a rally. Aggressive traders can continue buying this dip for a return to resistance. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.
Data due Thursday: All times EASTERN (-4 GMT)
3:55am EUR German Unemployment Change
4:00am EUR M3 Money Supply 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.
Today�s US Dollar Trading
� Most of the action was this morning
� USD holds gains but weakens into the end of day
� Traders note profit-taking bids in the majors
Overnight Preview � Likely a bout of short-covering due
� Quiet ahead of US data
Looking Ahead All times EASTERN (-4 GMT)
� 7:30am USD Challenger Job Cuts y/y
� 10:00am USD Factory Orders m/m
� All Day USD Total Vehicle Sales
� 2:00pm USD Beige Book
Summary
After a strong overnight session the USD held overnight highs across the board failing to extend the current rally during US trade today; as expected ISM data came in neutral-to-weaker giving the Greenback a bit of a pause this morning. Although trading at significant highs to start the week the USD has failed to attract aggressive new buying traders say and in fact has given back some gains to make lows for the New York session against Swissy; other pairs remain mired in two-way action. Cable bounced nicely off the early NY lows for a full handle before settling back; traders note stops were the main driver of the rate. Following Cable was EURO naturally; also making NY highs above the 1.4540 area the rate fell back in quiet two-way action as well. Despite the large drop in Oil the EURO was able to hold important support at the 1.4460/70 area so far today and traders note that both GBP and EURO were seeing signs of stabilizing; both pairs continued to see profit-taking bids on the drops all day. USD/JPY has gone nowhere today making all its moves overnight and failing at the 109.00 handle to close in the 108.70 area; traders note that the resignation of Fukuda overnight was largely a non-event. For the most part today the Greenback remained inside the ranges established in the first few hours of early NY today; despite a rally in stocks and a slight recovery in oil the majors were simply not going anywhere after the day got started. On the block tomorrow the major news is likely to be the Beige Book but traders do not expect anything in there to either favor or hurt the USD. Analysts remain convinced the US economy has more sideways consolidation or even retreat to go first before a significant amount of data is seen to inspire confidence in a recovery. Traders look for the USD to remain under upward pressure but admit that the USD is due for a correction. In my view, the majors are overextended to the downside and are showing signs of a near-term bottom. With sentiment favoring further declines yet an overextended technical picture it seems reasonable that a relief rally is due soon. Look for the USD to trade sideways tonight ahead of US data tomorrow.
GBP/USD Daily
Resistance 3: 1.8120/30
Resistance 2: 1.8080
Resistance 1: 1.8000/10
Latest New York: 1.7830
Support 1: 1.7780
Support 2: 1.7740/50
Support 3: 1.7720
Comments
Despite sharp drop during holiday trade the rate is attracting bids from larger names traders say; price drop likely over-extended on sympathy selling from EURO. Oil no doubt helping to drive trade but rate is becoming severely oversold. Overnight volumes lighter traders say; cross-spreaders active in Sterling and EURO. Drop is drawing profit-taking bids suggesting the bottom is finally trying to form near-term. Overdue for a short-covering rally. Likely an exhaustion drop. Close back above the 1.8020 area needed to take some of the pressure off. This stop-driven break is likely a head fake in my view. Traders expect GBP to track EURO through this week. Continue to expect a lot of cross-trading.
Data due Wednesday: All times EASTERN (-4 GMT)
Tentative GBP Halifax HPI m/m
4:30am GBP Services PMI
5:30am GBP BRC Shop Price Index y/y
EURO/USD Daily
Resistance 3: 1.4630
Resistance 2: 1.4600
Resistance 1: 1.4550
Latest New York: 1.4512
Support 1: 1.4460/70
Support 2: 1.4420
Support 3: 1.4400
Comments
Sympathy selling from GBP and lower oil drives rate into large stops under the 1.4550 area; likely an exhaustion drop as the rate is attracting professional buying. Volumes not impressive on the move traders say. Rate is overdue for a short-squeeze. EX reversals are now negated near-term if a close today is under previous support at the prior low of 1.4570 area. Traders suggesting that the rate is vulnerable to a short squeeze. Market is heavily short now so expect a rally. Aggressive traders can continue buying this dip for a return to resistance. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.
Data due Wednesday: All times EASTERN (-4 GMT)
4:00am EUR Final Services PMI
5:00am EUR Retail Sales m/m
5:00am EUR Revised GDP q/q
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.
Today�s US Dollar Trading
� USD fails to extend gains
� Majors make highs in New York
� BOC keeps rates firm
Overnight Preview
� Look for follow-on selling
Looking Ahead to Thursday
All times EASTERN (-4 GMT)
� 8:15am USD ADP Non-Farm Employment Change
� 8:30am USD Revised Nonfarm Productivity q/q
� 8:30am USD Unemployment Claims
� 8:30am USD Revised Unit Labor Costs q/q
� 10:00am USD ISM Non-Manufacturing PMI
� 10:35am USD Natural Gas Storage
� 11:00am USD Crude Oil Inventories
� 1:40pm USD FOMC Member Fisher Speaks
Summary
After a firmer start the USD has given back some of its gains today after minor US data failed to inspire further gains; technical factors also likely helped the majors stay the course of further erosion. Despite recent weakness the majors were able to stage an intraday rally during the New York session and close well off their lows after making highs during the day after the London fix today. Although a reversal is not quite underway the signs that the USD rally may at least take a pause during the next 24 hours are beginning to show. Cable rallied off the European lows for a high print at 1.7842 before sellers capped the move. Traders note a potential short squeeze could develop should new highs happen during the next day or two. EURO rallied as well for a high print at 1.4533 before sellers capped the move but the same result is possible should a rally extend past the 1.4550 area traders say. Although no major factors could support today�s action most analysts are suggesting that oversold conditions may result in a relief rally near-term. USD/JPY fell on stops for a low print at 108.09 and failed to attract additional buying on the dip ending the day near the lows and possibly in position to challenge the weekly lows around the 107.70 area. USD/CAD broke back as well printing a low print after the BOC rate announcement at 1.0576 drawing an additional reversal signal from the toolbox; traders note that unless the rate can manage another high above today�s high this week the rate has likely put in a double-top on the longer term charts. Swissy also reversed during the day making the USD a coordinated move lower across all the major pairs. In my view, the USD is overdue for a corrective rally and depending on the quality of that rally it might be resuming the overall longer-term bearish scenario. I would look for a net-lower overnight session in Asia tonight and with a lot of potentially bearish data due during the US session tomorrow it is likely that the USD will end lower on the week from here.
GBP/USD Daily
Resistance 3: 1.7950
Resistance 2: 1.7900
Resistance 1: 1.7850
Latest New York: 1.7769
Support 1: 1.7660/70
Support 2: 1.7620/30
Support 3: 1.7600
Comments
Rate showing signs of bottoming, light stops noted above the market. Profit-taking bids continue as well. Price drop likely over-extended on sympathy selling from EURO. Oil no doubt helping to drive trade but rate is becoming severely oversold. Overnight volumes lighter traders say; cross-spreaders active in Sterling and EURO. Drop is drawing profit-taking bids suggesting the bottom is finally trying to form near-term. Overdue for a short-covering rally. Likely an exhaustion drop. Close back above the 1.8020 area needed to take some of the pressure off. This stop-driven break is likely a head fake in my view. Traders expect GBP to track EURO through this week. Continue to expect a lot of cross-trading.
Data due Thursday: All times EASTERN (-4 GMT)
Tentative GBP Halifax HPI m/m
Tentative GBP MPC Rate Statement
7:00am GBP Official Bank Rate
EURO/USD Daily
Resistance 3: 1.4600
Resistance 2: 1.4550
Resistance 1: 1.4530
Latest New York: 1.4500
Support 1: 1.4370/80
Support 2: 1.4350
Support 3: 1.4300
Comments Rate showing signs of bottoming as well, likely stops rolled down to around the 1.4550 area. Likely an exhaustion drop as the rate is attracting professional buying. Volumes not impressive on the move traders say. Rate is overdue for a short-squeeze. EX reversals are now negated near-term; Traders suggesting that the rate is vulnerable to a short squeeze. Market is heavily short now so expect a rally. Aggressive traders can continue buying this dip for a return to resistance. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.
Data due Thursday: All times EASTERN (-4 GMT)
6:00am EUR German Factory Orders m/m
7:45am EUR Minimum Bid Rate
8:30am EUR ECB Press Conference
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.
Today�s US Dollar Trading
� USD rallies in US trade after starting weaker in Asia
� Two way technical trade the rule today
� Traders note volumes were moderate
Overnight Preview � Look for more consolidation
� Two-way action likely
Looking Ahead to Wednesday All times EASTERN (-4 GMT)
� 10:00am USD Existing Home Sales
� 10:00am USD Fed Chairman Bernanke Testifies
� 10:35am USD Crude Oil Inventories
� 2:30pm USD Fed Chairman Bernanke Testifies
Summary
The USD is slightly better today as traders continue to digest the effects and solutions to the recent financial crisis affecting global trade. Debate is raging on Capitol Hill regarding exactly how to implement the fiscal bailout plan proposed by the US treasury and the Federal Reserve. Sentiment is leaning more toward an emergency plan sooner-rather-than-later and if the US congress fails to act decisively and confidently by the end of the week it is likely that investor confidence in a solution will begin to wane. In response the Greenback opened better overnight and built on small gains into US trade and then as equities failed to hold gains began to slide off. Traders note that stops in most pairs were triggered during US action suggesting that many had set new USD shorts overnight or early today when the USD failed to hold gains but were whipsawed on minor price action. GBP railed for a high print overnight at 1.8636 before dropping back and made lows on the day in New York at 1.8470 before attempting a recovery back to the middle of the range. Traders note volumes were modest but enough to cause some intraday volatility. EURO followed cable lower during the day for a low print at 1.4621 before returning to the 1.4700 handle later; traders note that in both pairs a �buy the dip� mentality is currently in play but no one is certain how far a correction from recent strength may go. End result is that traders are nervous and unwilling to hold positions for too long leaving the markets vulnerable to intraday whipsaw. USD/JPY rallied for a new high in New York at 106.09 before dropping back to the low 105.00 handle; traders note technical resistance at the 106.00/20 area appears firm on the first try at a bounce. Other pairs are suffering the same fate as the USD/JPY; Swissy is off the rally highs at 108.15 with a high print at 1.0891. Traders note that the USD/CHF pair has made a perfect retracement to the breakdown point of 1.0880 before sliding off suggesting that the rate will likely suffer a move back to the lows around the 1.0700 handle. USD/CAD is falling back from its highs as well and looks almost certain to break the 1.0500 handle near-term; traders note that a lot of offers were absorbed in that pair suggesting that there is a lot of technical buying of support in Loonie. In my view, the USD is likely to continue two-way and cover a lot of the same ground twice but with a lower bias. Best action is to sell rallies in my view.
GBP/USD Daily
Resistance 3: 1.8700
Resistance 2: 1.8680
Resistance 1: 1.8620/30
Latest New York: 1.8573
Support 1: 1.8480
Support 2: 1.8420/30
Support 3: 1.8380
Comments Rate two-way overnight, remains near opening range into the close. Some selling pressure seen but rate is likely to press for highs on more bad news. Resistance is cleared the other side of the 1.8500 handle so expect a pullback to be bought hard. Aggressive traders can buy the next dip but also look to lighten longs into the 1.8700 area if it comes. Equities pullback vote of �no confidence� so far on the bailout. Possible sovereign interest on the rally as semi-officials seen on dips in both EURO and GBP recently. Some stops triggered along with active buying. In my view, the GBP has weathered the storm fairly well and it suggests no serious down move near-term. Traders note stops mixed with offers above the market also. Major support has held for two weeks now, any weakness likely to be bought hard. Profit-taking bids continue as well. Close above the 1.8500 area for the week likely argues for another leg higher to end the month.
Data due Wednesday: All times EASTERN (-4 GMT)
6:00am GBP CBI Realized Sales
4:45pm GBP MPC Member Sentance Speaks
EURO/USD Daily
Resistance 3: 1.4920/30
Resistance 2: 1.4880
Resistance 1: 1.4850
Latest New York: 1.4701
Support 1: 1.4620/30
Support 2: 1.4580
Support 3: 1.4550
Comments Rate two-way and likely tracking GBP a bit; follows GBP higher but lots of stops and active buying seen. Light pressure intraday easily absorbed despite fear of pullback. New weekly high yesterday below major resistance and rate is inside range so far today suggests a point of indecision. Likely support will hold at the 1.4330 area. Some upside drawn from Cable no doubt. Expect more two-way action with upside bias; traders note the rate is firm on dips so far despite the uncertainty in the market. Volumes better during European trade than in Asia overnight. Traders report offers in size being absorbed. Traders suggesting that the rate is trading technically but likely this rally forced techies to the sidelines. Close over the 1.4700 area to end this week will make a lot of shorts nervous next week possibly extending a short-covering rally. Expect a solid higher close for the week. If long, look to add to positions on any weakness. Likely a dip back to the 1.4300 handle will offer a solid buy opportunity.
Data due Wednesday: All times EASTERN (-4 GMT)
4:00am EUR German Ifo Business Climate
4:00am EUR Current Account
4:00am EUR Italian 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.
Oh my god! I thought it was updated and I was about to freak out when I saw the EURO/USD Daily with the figures showing something completely different5 to reality today, I suggest that we keep this thread updated
Today�s US Dollar Trading
� USD covers the same ground twice in two-way action
� Volumes modest
� Traders remain focused on bailout options
Overnight Preview
� Look for the USD to remain two-sided
� Potential to rally increasing
Looking Ahead to Thursday All times EASTERN (-4 GMT)
� 8:30am USD Core Durable Goods Orders m/m
� 8:30am USD Unemployment Claims
� 8:30am USD Durable Goods Orders m/m
� 10:00am USD New Home Sales
� 10:35am USD Natural Gas Storage
� 1:00pm USD FOMC Member Warsh Speaks
� 7:30pm USD FOMC Member Fisher Speaks
� 7:45pm USD FOMC Member Plosser Speaks
Summary
The USD is on the offensive this afternoon although volumes are light and trade seems driven by rhetoric and technical factors. Traders remain nervous over the delay in passing the bailout bill and adding insult to injury today�s testimony by Paulson and Bernanke on Capitol Hill has been largely a repeat of yesterday�s discussion suggesting that legislator�s are dragging their feet or just plain need to have something told to them twice. Equities have been two-sided as have been traditional hedges such as gold and bonds. Traders note that if much more �talking� instead of �acting� were to continue then investor confidence may begin to turn south. GBP continued to trade within existing ranges but had a sharp break lower mid-day as the USD had a rally late; low prints at 1.8474 are still a healthy 10 handles off the lows but the charts are looking a bit bearish this afternoon. EURO suffered the same breaking back to new lows in New York trade for a low print at 1.4628; traders note that stops were triggered on new lows in both pairs suggesting that late longs were buying dips. USD/JPY tried for a new high but has encountered strong resistance at the 106.20/30 area as the pair rallied back from low prints in New York at 105.34 to trade 106.10 late in the day. This kind of whipsaw is to be expected but the key thing is for the rate to hold under the 106.30 area in my view. Swissy rallied as well making new lows this morning then bouncing to new highs this afternoon; high prints at 1.0915 were offered by technical traders but more whipsaw is expected. Across the board the Greenback is under duress as technical factors favor two-way trade but fundamentals favor lower prices; today�s existing home sales again showed a decline but as expected traders are remaining focused on the bailout plan. Should congress fail to reach at least a reasonable agreement the next 24 hours I think the markets will vote �no confidence� in any plan by early next week. Despite the recent rally in the majors a pullback is to be expected and with the uncertainty it would be reasonable to expect large volatility near-term. If holding USD shorts it is wise to either lighten up or go flat completely. Look to exploit a USD rally by selling into the move should the USD have a retracement.
GBP/USD Daily
Resistance 3: 1.8700
Resistance 2: 1.8680
Resistance 1: 1.8620/30
Latest New York: 1.8512
Support 1: 1.8480
Support 2: 1.8420/30
Support 3: 1.8380
Comments
Rate two-way overnight, remains near unchanged to open New York; two-way action continues. Some selling pressure seen but rate is likely to press for highs on more bad news. Resistance is cleared the other side of the 1.8500 handle so expect a pullback to be bought hard. Aggressive traders can buy the next dip but also look to lighten longs into the 1.8700 area if it comes. Equities pullback vote of �no confidence� so far on the bailout. Possible sovereign interest on the rally as semi-officials seen on dips in both EURO and GBP recently. Some stops triggered along with active buying. In my view, the GBP has weathered the storm fairly well and it suggests no serious down move near-term. Traders note stops mixed with offers above the market also. Major support has held for two weeks now, any weakness likely to be bought hard. Profit-taking bids continue as well. Close above the 1.8500 area for the week likely argues for another leg higher to end the month.
Data due Thursday: All times EASTERN (-4 GMT)
8:40am GBP MPC Member Barker Speaks
EURO/USD Daily Resistance 3: 1.4800/10
Resistance 2: 1.4780
Resistance 1: 1.4710/20
Latest New York: 1.4627
Support 1: 1.4620/30
Support 2: 1.4580
Support 3: 1.4550
Comments
Late pullback on technical factors; some spillover from GBP. Rate two-way and dips are being bought, follows GBP higher but lots of stops and active buying seen. Light pressure intraday easily absorbed despite fear of pullback. Weekly high below major resistance and rate is inside range so far today suggests a point of indecision. Likely support will hold at the 1.4330 area. Some upside drawn from Cable no doubt. Expect more two-way action with upside bias; traders note the rate is firm on dips so far despite the uncertainty in the market. Volumes better during European trade than in Asia overnight. Traders report offers in size being absorbed. Traders suggesting that the rate is trading technically but likely this rally forced techies to the sidelines. Close over the 1.4700 area to end this week will make a lot of shorts nervous next week possibly extending a short-covering rally. Expect a solid higher close for the week. If long, look to add to positions on any weakness. Likely a dip back to the 1.4300 handle will offer a solid buy opportunity.
Data due Thursday: All times EASTERN (-4 GMT)
2:00am EUR GfK German Consumer Climate
4:00am EUR Italian Trade Balance
4:00am EUR M3 Money Supply y/y
4:00am EUR Private Loans 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.
[B][U]Today�s US Dollar Trading[/U][/B]
� Stops and active selling drive majors to new lows
� USD/JPY falls to parity
� Volumes only moderate
[B]Overnight Preview[/B]
� More follow-on selling expected
� USD likely to consolidate
[B]Looking Ahead to Tuesday[/B]
All times EASTERN (-4 GMT)
� 11:00am USD FOMC Member Stern Speaks
� 1:15pm USD Fed Chairman Bernanke Speaks
� 2:00pm USD FOMC Meeting Minutes
� 3:00pm USD Consumer Credit m/m
[B][/B]
[B][U]Summary[/U][/B]
Traders are buying USD in size as flight to quality fears pervade a global meltdown in the financial sector. Equities were off over 800 points in late trading as the DJIA drops under the 10,000 level; NASDAQ off under the 1800 area leaving that market at a ten-year low. Oil off as well trading under the $90.00/BBL level as traders fled commodities as well. Of course the USD rallied as value was re-adjusted leaving the major currencies falling hard with the exception of USD/JPY; USD/JPY dropped over 600 points for a low print at 100.22 as equities fell off leaving the Yen as the reserve currency today. GBP and EURO fell hard as well with both pairs well below technical levels considered important for continued gains against the USD suggesting that the USD has more upside to go; although that is remote as there are few buyers left after a move like this. GBP fell to a low print at 1.7335; EURO low prints at 1.3453. Traders note that sentiment is so overwhelmingly fearful of counterparty risk that there are no buyers for the majors despite price levels that only six months ago would be considered dirt-cheap. In my view, the USD is acting as a flight-to-quality recipient to the point that no one will buy anything else. In a situation like this it is almost impossible to find a bottom in the majors as traders have little to base a price fix on because the markets are trading with so little common-sense; everyone is panicking to the point that no one will let go of their USD and will only look to buy more. I think it is important to remember that in a trading environment like this there will be some incredible values coming around the block soon. When the process of USD flight to quality ends the USD will become more vulnerable than it likely has been in 50 years. No matter your personal point of view today, this rally in the USD is not sustainable in my view and you need to be ready to sell the Greenback soon.
[B][/B]
[B][U]GBP/USD Daily[/U][/B]
Resistance 3: 1.8180
Resistance 2: 1.8050
Resistance 1: 1.7880
Latest New York: 1.7433
Support 1: 1.7340
Support 2: 1.7280
Support 3: 1.7200
[B]Comments[/B]
Rate is two-way on the way down to trade under support around the 1.7300 area; volumes lighter and traders note large names absent. 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; 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.
Data due Tuesday: All times EASTERN (-4 GMT)
Tentative GBP Halifax HPI m/m
4:30am GBP Manufacturing Production m/m
4:30am GBP Industrial Production m/m
7:01pm GBP Nationwide Consumer Confidence
[B][/B]
[B][U]EURO/USD Daily[/U][/B]
Resistance 3: 1.3900/10
Resistance 2: 1.3880
Resistance 1: 1.3800/10
Latest New York: 1.3518
Support 1: 1.3440
Support 2: 1.3400
Support 3: 1.3380
[B]Comments[/B]
Rate fails overnight at the two-year 50% fib defense at 1.3850 after a volatile start; 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 Tuesday: All times EASTERN (-4 GMT)
6:00am EUR German Factory Orders m/m
9:30am EUR ECB President Trichet Speaks
Written by Jason Alan Jankovsky
[B]Disclaimer:
[/B]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.
I�m not getting it! I thought the dollar was going to fall against the Euro and GBP, and thinking just in case� I placed an order in the USD/JPY but the dollar is recovering against euro and GBP and falling with the JPY parity� what the hell is going on?
