Daily Analysis Thread

[ForexPros]

Today�s US Dollar Trading

� Two-way action due to equities
� Traders note USD feels neutral
� EURO makes lows late

Overnight Preview

� Look for more USD upside to start overnight
� Two-way action likely to continue into US tomorrow

Looking Ahead to Wednesday
All times EASTERN (-5 GMT)
� 8:30am USD Building Permits
� 8:30am USD Core CPI m/m
8:30am USD CPI m/m
� 8:30am USD Housing Starts
� 9:00am USD FOMC Member Kohn Speaks
� 10:35am USD Crude Oil Inventories
� 2:00pm USD FOMC Meeting Minutes

Summary
The USD continued in solid two-way trade today after earlier gains gave way to losses mid-day and then reversed yet again to finish better on the day against most pairs. Traders blame volatility in equities today for the whipsaw across the board as Wall Street was unable to hold gains into the end of the day. GBP rallied overnight into high prints at 1.5094 but those highs remained unchallenged in New York trade as sellers offered the rate lower more than a full handle to finish at the 1.4920 area; traders note pressure from EURO losses late in the day suggesting that the near-term lows still are under threat for additional attempts for new 2008 lows. EURO tracked equities for most of the day rallying to new US highs mid-day at 1.2701 before reversing to make new lows on the day at 1.2566 making for a slight reversal on the charts; traders in both pairs note that the same buyers seen the past few sessions were back on the dips but unable to hold gains suggests that stops will build overnight under current lows. USD/JPY had high prints on equities strength at 97.42 before reversing with stocks for a test of the lows at 96.01 but unable to trigger stops said to be resting in that area; the rate holding at 96.50 into the end of day. USD/CHF rallied in thin volume to find stops above the 1.2024 area for a new two-year high at 1.2049 and ends firm above the 1.2000 area at 1.2030; traders note that technical buying appears to be holding the rate firm as reversal signals evaporate in late trade. Weaker commodities pricing also cited for the better USD although usually that would be bearish in the rate making for difficult trade. Today�s US data was considered neutral for the Greenback and traders note that despite the volatility and two-way action today the USD feels neutral on the day suggesting that more two-way action is likely overnight. In my view, despite the late rally in the USD , the recent ranges are holding with the exception of Swissy suggesting that the majors will continue to sketch out wide trading ranges as we head into the end of the week and possibly the month. With a short week next week for the US Thanksgiving holiday expect book-squaring and liquidation of positions as traders finish the last full week of the month by Friday. Overnight the Yen crosses likely will remain in focus as lower equities have prompted Yen selling so expect more losses for the majors as they rotate back to the lows ahead of US trade.

GBP/USD Daily

Resistance 3: 1.5200/10
Resistance 2: 1.5150
Resistance 1: 1.5080
Latest New York: 1.4926
Support 1: 1.4650
Support 2: 1.4580
Support 3: 1.4480/1/4500

Comments

Overhead resistance around 1.5100 holds on first try today, tracking EURO and equities for the most part. Traders note stops above the 1.5100 handle likely building near-term. Resistance is expected to hold rate for a pullback and aggressive traders can buy that dip if it comes. Cross spreaders continue to hold interest near-term; profit-taking likely to result in a squeeze on the further strength. Thin conditions continue to exacerbate moves. Some stops noted on the break back over the 1.4850, 1.5000, and 1.5050 areas yesterday; the rate continues two-way on the move. Technical trade overnight as traders decide near-term action with little to go on but the charts. BOE rate cut next month increasingly likely but that is likely completely factored in at this point. Traders note liquidity is only moderate and still on the lower side. Aggressive traders can look to buy the next dip.
Data due Wednesday: All times EASTERN (-5 GMT)
4:30am GBP MPC Meeting Minutes
6:00am GBP CBI Industrial Order Expectations
1:40pm GBP MPC Member Gieve Speaks

EURO/USD Daily

Resistance 3: 1.2850
Resistance 2: 1.2800
Resistance 1: 1.2750
Latest New York: 1.2621
Support 1: 1.2520/1.2500
Support 2: 1.2450/60
Support 3: 1.2400

Comments

Rate reverses after highs at 1.2700 area attract profit-taking by the longs and selling by the shorts; rate dips to lows into the 1.2500 handle and a drop to support likely overnight. Two-way action still suggesting a point on indecision; traders note stops building above the market around the 1.2750 area or so suggesting short-term traders active. New weekly low rejected fairly hard suggesting a re-test is a solid buy if not already long on the dip. Traders report some semi-official interest the past 48 hours. Resistance is still formidable but large names on the dips traders say. On a rally, traders note large stops at the 1.2950 area with more over 1.3000 but offers likely to cap. 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. 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 (-5 GMT)
NONE

Forex Analysis by: Forexpros.com - Written by Jason Alan Jankovsky

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

[ForexPros]

[B]Today�s US Dollar Trading[/B]

� USD starts weaker, stops drive majors higher
� Upside resistance holds and the majors drop hard
� Volumes high on the move

[B]Overnight Preview[/B]

� Look for the USD to follow-on higher early overnight
� Should get quiet ahead of US data
[B]
Looking Ahead to Thursday[/B]
All times EASTERN (-5 GMT)
� 8:30am USD Unemployment Claims
� 10:00am USD Philly Fed Manufacturing Index
� 10:00am USD CB Leading Index m/m
� 10:35am USD Natural Gas Storage
� 2:00pm USD Treasury Sec Paulson Speaks

[B]Summary[/B]
After early US data was unfriendly to the USD and the greenback suffered losses the USD roared back from lows and scored new highs against most major pairs in mid-day trade. Traders note that stops above the major pairs gave early strength a boost but once the buying dried up the majors reversed hard and fell back into lows. GBP failed to challenge overnight lows at 1.4903 but dropped to the low 1.5000 handle making for a hard reversal from the high prints at 1.5252. Traders note that semi-official selling and potential sovereigns near the highs likely turned the rally back. EURO suffered a harder turn as high prints at 1.2815 on high volume were turned back and the rate made new lows on the day at 1.2545 before regaining the 1.2600 handle in late trade. Both EURO and GBP appeared to be tracking each other suggesting that the move was a coordinated short-squeeze before falling back. Traders also note that volumes were high in both pairs and that stops did attract new buying but once the opening ranges fell to selling pressure late longs bailed on intra-day longs. USD/CHF made early lows under the 1.2000 handle at 1.1943 before reversing; the open hook reversal was negated as the rate crossed the 1.2050 area and scored new highs at 1.2148 before falling back to the 1.2090 area. Swissy appears to be getting a lift from weakness in Oil some traders say. Equities lower on the day after erasing losses on the open gave most of the pairs additional pressure traders say and USD/JPY remained lower on the day after an early rally failed to score new highs. High prints in the rate at 97.16 went unchallenged and as equities gave up gains the rate fell into lows; low print at 96.00 was unable to trigger resting stops as other pairs had done. Late data included the FOMC minutes of the latest meeting and traders note that the minutes show no real news but the pressure on the USD to rally likely was done ahead of the news suggesting that the move may have been technical to start; once the volatility hit the market it was unlikely that news would be in focus. In my view, the upside move in the majors was due to be sold as it was the first attempt at the overhead resistance area recently broken; the speed and depth of the retracement was unexpected and no doubt will inspire additional follow-on selling overnight. Should the USD fail to follow-through with any conviction it is likely the upside bounce may be the exhaustion rally. Look for the majors to consolidate ahead of US data in the morning which again is expected to be USD unfriendly.
[B]
GBP/USD Daily [/B]

Resistance 3: 1.5300/10
Resistance 2: 1.5280
Resistance 1: 1.5250
Latest New York: 1.4975
Support 1: 1.4900
Support 2: 1.4820/30
Support 3: 1.4700
[B]
Comments[/B]

Overhead resistance around 1.5100 gives way to stops above lifting the rate to highs at 1.5250; failure and reversal suggests rate is set to rotate lower and test support around the 1.4820 area. Traders note stops above the 1.5100 handle we in size but new buying turned back. Traders also note the same names seen in size on the bid the past few days. Resistance is expected to hold rate for a pullback and aggressive traders can buy that dip if it comes. Cross spreaders continue to hold interest near-term; profit-taking likely to result in a squeeze on the further strength. Technical trade overnight as traders decide near-term action with little to go on but the charts. BOE rate cut next month increasingly likely but that is likely completely factored in at this point. Traders note liquidity is only moderate and still on the lower side. Aggressive traders can look to buy the next dip.
Data due Thursday: All times EASTERN (-5 GMT)
4:30am GBP Retail Sales m/m
4:30am GBP Prelim M4 Money Supply m/m
4:30am GBP Public Sector Net Borrowing

[B]EURO/USD Daily [/B]

Resistance 3: 1.2880
Resistance 2: 1.2850
Resistance 1: 1.2800/10
Latest New York: 1.2535
Support 1: 1.2520/1.2500
Support 2: 1.2450/60
Support 3: 1.2400

Comments

Rate reverses after highs at 1.2815 area attract profit-taking by the longs and selling by the shorts; rate dips to lows into the 1.2500 handle again. Bids support to hold rate firm after whipsaw. Two-way action still suggesting a point on indecision; traders note stops building above the market around the 1.2750 area in size suggesting short-term traders active; stops cleared and new buying turned back. Traders report some semi-official interest the past 48 hours with possible sell interest at the highs today. Resistance is still formidable but large names on the dips traders say. On a rally, traders note large stops at the 1.2950 area with more over 1.3000 but offers likely to cap. 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. 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 (-5 GMT)
2:00am EUR German PPI m/m

[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.

[ForexPros]

Overnight Asia/Europe

� USD opens flat to slightly better, reverses as equities rise
� US Data due today likely to be USD unfriendly
� Tokyo closed for holiday

Today�s Economic Reports
All times EASTERN (-5 GMT)
� 10:00am USD Existing Home Sales
� Very light day for everyone on Monday

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
� 8:30am USD Prelim GDP q/q
� 8:30am USD Prelim GDP Price Index q/q
� 9:00am USD S&P/CS Composite-20 HPI y/y
� 10:00am USD CB Consumer Confidence
� 10:00am USD HPI m/m
� 10:00am USD Richmond Manufacturing Index

Summary
The USD is under pressure this morning after starting a holiday-shortened week about flat in Asia. Tokyo had a holiday today leaving a lot of Asian players on the sidelines making for slow and thinner trade; traders report that stops are building on both sides of the market after last week�s neutral close and Friday�s USD retreat. Equities provided a bit of lift to the majors as follow-on buying of Asian markets and Europe holding firm ahead of US trade. DJOA futures are called to open higher on Wall street which is no doubt keeping the majors on the offensive to start the day. USD/JPY rallied higher with equities as expected but was unable to clear above the 96.00 handle with any conviction; high prints at 96.09 were offered to cap the rate before heading lower. Traders note that most desks expect further price declines in the rate as the Yen technically remains the strongest currency on the board. GBP held Friday�s lows with a low print at 1.4840 before reversing and slowly building momentum into highs; high prints in late Europe at 1.5046 with traders noting stops above the psychological 1.5000 area getting hit. EURO held above Friday�s lows as well; low prints at 1.2566 in European trade after starting flat in two-way action in Asia. Traders note that this morning�s IFO sentiment index came in lower than forecast at 85.8 and traders offered the rate lower but were unable to find stops; high prints at 1.2720 in late European trade as the rate reversed losses on positive equities. Traders note that both GBP and EURO saw semi-official names and an Asian sovereign on the offers overnight but size was smaller suggesting that selling interest from large traders may be dropping a bit. USD/CHF opened lower and held off an attempt to rally; high prints at 1.2228 area under Friday�s highs with lows at 1.2124 holding previous resistance suggesting that stops will be building as expected around the 1.2080 area. Aggressive traders can sell strength in the rate above the 1.2180 area in my view. USD/CAD is also under pressure staying near lows at 1.2650 area with a low print at 1.2635 in early New York making for a clean sweep against the USD to start the week. IN my view the USD is putting in a top at current levels continuing to make signs that buyers are running out and that the majors are continuing to consolidate ahead of a solid short-squeeze. With a holiday-shortened week it is possible that traders will square their books ahead of the four day weekend and with a market that is heavily long that would mean some significant selling pressure. Look for the USD�s fortunes to ebb and flow with equities today; a higher close on Wall Street would likely encourage the EURO to rally a bit.

GBP/USD Daily

Resistance 3: 1.5200/10
Resistance 2: 1.5120/30
Resistance 1: 1.5050
Latest New York: 1.4949
Support 1: 1.4700/10
Support 2: 1.4650
Support 3: 1.4550

Comments
Follow-on selling drops rate into next support at the 1.4700 area last week but rate starts firmer. Traders note solid two-way action with stops building above the market likely in the 1.5050 area and higher. Some stops over 1.5000 flushed overnight. Sellers hold control above 1.5000 today as rate backs off highs but lows hold. OK to buy if flat on a dip. Traders also note the same names seen in size on the bid the past few days has been on the offer overnight. Cross spreaders continue to hold interest near-term; profit-taking likely to result in a squeeze on the further strength. Technical trade overnight as traders decide near-term action with little to go on but the charts. BOE rate cut next month increasingly likely but that is likely completely factored in at this point. Traders note liquidity is only moderate and still on the lower side. Aggressive traders can look to buy the next dip.
Data due Tuesday: All times EASTERN (-5 GMT)
4:30am GBP BBA Mortgage Approvals
4:30am GBP Prelim Business Investment q/q
4:45am GBP MPC Treasury Committee Hearings

EURO/USD Daily

Resistance 3: 1.2880
Resistance 2: 1.2850
Resistance 1: 1.2800/10
Latest New York: 1.2744
Support 1: 1.2420
Support 2: 1.2380
Support 3: 1.2320/30

Comments
High prints in early New York as stocks firm further ahead of the US open. Follow-on selling drops the rate into light stops after IFO data released but lows hold above Friday�s action. Rally off the lows to score highs at 1.2740 area suggests bids are building under the 1.2600 area as expected. OK to try the long side again on a dip. Bids support to hold rate firm after whipsaw; likely some spillover support from GBP. Two-way action still suggesting a point on indecision; traders note stops building above the market around the 1.2750 area in size suggesting short-term traders active on the sell-off; stops under the market in size likely around 1.2350 now after weekly lows last week hold. Traders report some semi-official interest the past 72 hours with possible sell interest at the highs overnight to start. On a rally, traders note large stops at the 1.2950 area with more over 1.3000 but offers likely to cap. Support also from cross-spreaders as they unwind Yen. Rate is an absolute screaming buy in my view�I can�t see further weakness being ignored by the buyers. Traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market.
Data due Tuesday: All times EASTERN (-5 GMT)
2:00am EUR GfK German Consumer Climate
2:00am EUR German Final GDP q/q

Join us for the Morning FOREX Briefing daily at 7:45 AM Central/Chicago time (GMT -5)
Forex analysis by Forexpros.com - Written by Jason Alan Jankovsky

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

[ForexPros]

Today�s US Dollar Trading

� USD falls on long-liquidation
� Stops noted in all pairs
� Volumes better

Overnight Preview

� Look for follow-through in Asia on firm equities
� Should get quiet ahead of US data tomorrow

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
� 8:30am USD Prelim GDP q/q
� 8:30am USD Prelim GDP Price Index q/q
� 9:00am USD S&P/CS Composite-20 HPI y/y
� 10:00am USD CB Consumer Confidence
� 10:00am USD HPI m/m
� 10:00am USD Richmond Manufacturing Index

Summary
The USD continued to slide into late afternoon trade pushing the majors to late highs as equities continued to climb posting solid gains and holding them into the close. Traders note that much of the day�s action was driven by stops as the majors climbed to new weekly highs in some pairs. Major support/resistance in several pairs helped to drive fresh USD selling as well and the speculation is high that the USD will face follow-on long-liquidation into Tuesday�s trade. Traders remind that the holiday shortened week will likely encourage book-squaring and today�s action helped to confirm that view as the USD bulls headed for the sidelines. GBP rallied to a high print at 1.5181 making a show toward last weeks� highs and holding firm into the close suggesting more short-covering is on the way; traders note stops were thick on the move over the 1.5080 area with more likely over the 1.5250 area. EURO rallied to a high print at 1.2911 before sellers capped the move but stops were thick above the 1.2770 area with more noted at 1.2850; traders also note that EURO scored a new weekly high today suggesting that a potential reversal is in the works. US equities held triple-digit gains closing near the highs for the day lifting USD/JPY for a high print just under 97.00 at 96.98; traders note stops over the 96.50 area helping to lift the rate as well. Aggressive traders will note that the rate is now near the previous sell-zone around 97.00 to 97.50; no doubt follow-on buying will attract sellers in that range so be ready for a potential pullback from over the 97.00 handle. USD/CAD fell to a low print at previous support of 1.2240 making for a secure double-top near-term; the rate recovered a bit into the 1.2300 handle suggesting that the rate may be leading the complex on the break lower and finding technical support first across the board. Aggressive traders can sell into a rally to the 1.2480/1.2520 area in my view. USD/CHF found stops in size at the 1.2080 and more at 1.2030 area for a low print at 1.1954; traders note that Friday�s hook reversal is validated and most likely a long-liquidating break is in play in the rate. In my view, today�s price action builds credibility for a top in the USD as the move higher by the majors was fully coordinated across the board suggesting the move was USD-based and not cross-spreaders or driven by individual reasons in each pair. The USD was under pressure across the board making the move likely a long-liquidation break. Traders note that the major news for the week is due tomorrow and should that be unfriendly to the USD it is likely that the majors will follow-through tomorrow. Look for the majors to follow higher overnight Asia to start and then get quiet ahead of US GDP numbers in the morning.

GBP/USD Daily

Resistance 3: 1.5350
Resistance 2: 1.5280
Resistance 1: 1.5200/20
Latest New York: 1.5161
Support 1: 1.4700/10
Support 2: 1.4650
Support 3: 1.4550

Comments

Stops rally trade as equities firm, volumes a bit better but still off earlier highs. Traders note solid two-way action with stops building above the market likely in the 1.5050 area and higher triggered. Sellers hold control above 1.5100 area so far but how the rate trades into US news tomorrow will tell more. OK to buy if flat on a dip. Traders also note the same names seen in size on the bid the past few days has been on the offer overnight. Profit-taking likely to result in a squeeze on the further strength. Technical trade overnight as traders decide near-term action with little to go on but the charts. BOE rate cut next month increasingly likely but that is likely completely factored in at this point. Traders note liquidity is only moderate and still on the lower side. Aggressive traders can look to buy the next dip.
Data due Tuesday: All times EASTERN (-5 GMT)
4:30am GBP BBA Mortgage Approvals
4:30am GBP Prelim Business Investment q/q
4:45am GBP MPC Treasury Committee Hearings

EURO/USD Daily

Resistance 3: 1.3020/30
Resistance 2: 1.3000
Resistance 1: 1.2950
Latest New York: 1.2916
Support 1: 1.2420
Support 2: 1.2380
Support 3: 1.2320/30

Comments

High prints in New York as stocks firm further, follow-on selling drops the rate into light stops after IFO data released but lows hold above Friday�s action and stops lift to new weekly highs. Possible reversal now in play. Bids are building under the 1.2600 area as expected; sell-off likely to be bought hard now. OK to try the long side again on a dip. Likely some spillover support from GBP. Traders note stops building above the market around the 1.2750 area in size cleared with no pullback suggesting rate will look for the stops noted around the 1.2950 area with more over 1.3000 but offers likely to cap. Support also from cross-spreaders as they unwind Yen. Rate is an absolute screaming buy in my view�I can�t see further weakness being ignored by the buyers. Traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market.
Data due Tuesday: All times EASTERN (-5 GMT)
2:00am EUR GfK German Consumer Climate
2:00am EUR German Final GDP q/q

Forex Analysis by: Forexpros.com - Written by Jason Alan Jankovsky

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

[ForexPros]

Today�s US Dollar Trading

� USD continues slide, stops drive trade
� Aggressive buying of GBP seen in afternoon trade
� Volumes remain lighter amid thinner conditions

Overnight Preview

� Look for more two-way action
� USD likely to remain under pressure

Looking Ahead to Wednesday and end of week
All times EASTERN (-5 GMT)
� Closed Wednesday, markets have early close
� Broadcasts and Newsletters return Monday December 1
� 8:30am USD Durable Goods Orders m/m
� 8:30am USD Personal Spending m/m
� 8:30am USD Personal Income m/m
� 9:45am USD Chicago PMI
� 9:55am USD Revised UoM Consumer Sentiment
� 9:55am USD Revised UoM Inflation Expectations
� 10:00am USD New Home Sales

Summary
The USD continued to slide today after the release of benign US Q3 GDP estimates; traders note that early USD strength was stop-driven on low volume suggesting that the Greenback is running out of committed buyers as we head into a holiday shortened week. Analysts remind that year-end book-squaring will likely add a bit of pressure to the USD and technical factors are not positive after the turnaround seen the past 72 hours or so. Today�s announcement by the US Fed that additional liquidity products will be available, most notably the purchase of commercial paper, sends a double-edged message to the markets. On the one hand it adds credibility to the commitment to bail-out the credit crisis as a positive; on the other hand it adds one more flood of liquidity to the market that is not responding by loosening credit. In my view, with all this cash held in reserve it is only a matter of time before that cash goes into the system and that is a big negative to the USD in my view. Today�s trading seemed to back up this point of view as the USD was whacked for the second day. GBP rallied hard through stops layered above the market and came near a two year high at 1.5476 before sellers capped the move. Likely early longs liquidating and shorts covering squared off with the shorts loosing into the last full day of trading this week. Technically the GBP has put in a reversal by trading above last week�s highs and traders note that volumes were only fair on the move suggesting more two-way action will be the rule. EURO high prints more subdued but still over resistance at 1.3082 with stops noted above the 1.3050 area; lows at 1.2803 went unchallenged after the US data through the London fix. USD/JPY fell to weekly support at 94.92 missing stops said to be resting in that area. Overnight highs in Asia at 97.44 again show offers are willing on rallies. USD/CHF fell through key support at 1.1880 for a low print at 1.1829 making a solid show of long-liquidation; traders note the recovery back to the 1.1880 area show the bulls are not quite willing to throw in the towel at this point. USD/CAD again tested support is high volatility with a low print at 1.2124 before rallying a full two-handles highs to end above the 1.2300 handle; traders note that thin conditions probably exaggerated the moves but tell that to the late bulls who were crushed on the move. In my view, the USD is continuing to sketch in a significant top. With a long weekend now in play it is likely the USD will continue to whipsaw and volumes dry up ahead of Thursday. Look for interest in the markets to drop dramatically after the US open for the last round of news this week. Have a great weekend and see you on Monday.

GBP/USD Daily

Resistance 3: 1.5680
Resistance 2: 1.5620
Resistance 1: 1.55550
Latest New York: 1.5510
Support 1: 1.4700/10
Support 2: 1.4650
Support 3: 1.4550

Comments

Late rally extends to clear resistance�traders note aggressive bids across all pairs. Quiet corrective action in light trade overnight. Good bids reported but supply seen from semi-official names. Stops in range helps to pressure but support is on technical numbers around 1.5050 area. Traders note solid two-way action with stops building above the market likely in the 1.5250 area and higher. Sellers hold control above 1.5100 area so far but how the rate trades into US news today will tell more. OK to buy if flat on a dip. Traders also note the same names seen in size on the bid the past few days has been on the offer overnight. Profit-taking likely to result in a squeeze on the further strength. Technical trade overnight as traders decide near-term action with little to go on but the charts. BOE rate cut next month increasingly likely but that is likely completely factored in at this point. Traders note liquidity is only moderate and still on the lower side. Aggressive traders can look to buy the next dip.
Data due Wednesday: All times EASTERN (-5 GMT)
4:30am GBP Revised GDP q/q
4:30am GBP Index of Services 3m/3m

EURO/USD Daily

Resistance 3: 1.3200
Resistance 2: 1.3120/30
Resistance 1: 1.3100
Latest New York: 1.3070
Support 1: 1.2800/10
Support 2: 1.2730
Support 3: 1.2650

Comments

Late rally with spillover from GBP clears all resistance; next level due around 1.3130 area or slightly higher. Possible reversal now in play but the rate needs to be firm within 24 hours. Bids are building under the 1.2600 area as expected; sell-off likely to be bought hard now. OK to try the long side again on a dip. Likely some spillover support from GBP. Traders note stops building above the market around the 1.2750 area in size cleared suggesting rate will look for the stops noted around the 1.2950 area with more over 1.3000 but offers likely to cap. Support also from cross-spreaders as they unwind Yen. Rate is an absolute screaming buy in my view�I can�t see further weakness being ignored by the buyers. 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 (-5 GMT)
2:00am EUR German Import Prices m/m
All Day EUR German Prelim CPI m/m

Forex Analysis by: Forexpros.com - Written by Jason Alan Jankovsky

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

[ForexPros]

[B]Get excited for our upcoming FREE webinar[/B] - How to determine the forex market cycles -Types of market moves

Featuring Dr. S. Sivaramen of I-knowindices.
Wed, Dec 3, 2008, 13:00 GMT

The webinar will cover the following topics:

* Varied volatile moves of the Forex market
* The extremes, moves and spikes
* Big players intentions
* Market sentiments and trap moves

Overnight Asia/Europe

� USD opens weaker, rallies a bit
� Majors mixed in solid two-way action
� UK data unfriendly to the GBP

Today�s Economic Reports
All times EASTERN (-5 GMT)
� 10:00am USD ISM Manufacturing PMI
� 10:00am USD Construction Spending m/m
� 10:00am USD ISM Manufacturing Prices

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
� All Day USD Total Vehicle Sales
� 12:30pm USD FOMC Member Plosser Speaks

Summary
The USD is mixed in early New York after trading two-way and technical during the holiday shortened week. Traders note that a weak start to the week in Gold and Crude Oil is helping to support the USD overnight. Traders note the USD is holding roughly within existing ranges but that some stops were noted as the EURO and GBP crossed last weeks� opening range suggesting some technical trading continues in two-way action. Poor UK economic data pressured GBP in overnight action pushing the rate to a low print of 1.5010 in late European trade; traders note stops on a break of the 1.5120 area in size. EURO is spilling over some pressure on the day; low prints at 1.2620 after stops were seen around the 1.2700 handle. High prints at 1.2713 suggesting that stops were above the market and sold by traders; some pressure seen from CTA-type accounts traders say. Firmer equities last week are giving way to weaker equities this week as USD/JPY remains under pressure; low prints at 93.51 breaking under the 93.70 area but bids are currently supporting the rate just hovering off the lows. USD/CHF is unable to hold the 1.2200 handle as some traders expected as the rate has only shown modest signs of a top after firming a bit last week; high prints at 1.2156 attracted selling with lows in late Europe at 1.2059. USD/CAD continues to flirt with the technical 1.2420/30 area; high prints at 1.2478 with lows at 1.2359. Traders note that the rate continues to attract bids on the dips and offers on the rallies suggesting more two-way action in the pair near-term. USD/CAD is technically the one most likely to pull back in my view with a firm double-top in place; recent action appears to confirm more two-way action before a move one way or the other. In my view, now that the �silly season� is in play through the end of the year I think we can expect more two-way action and a lot of aggressive moves that reverse. The USD has a seasonal tendency to firm into the end of year as well as rally during the first few months of a new president in office. I think the financial crisis is holding the USD artificially high and that any seasonal or residual USD strength is already factored in. Look for the USD to continue two-way into overnight trade and more two-way action tomorrow ahead of the news.

GBP/USD Daily

Resistance 3: 1.5680
Resistance 2: 1.5620
Resistance 1: 1.5550
Latest New York: 1.4976
Support 1: 1.4700/10
Support 2: 1.4650
Support 3: 1.4550

Comments

Rate forced lower to start the week after consolidating gains last week. Good bids reported but supply seen from semi-official names. Stops in range helps to pressure but support has failed at 1.5050 area. Traders note solid two-way action with stops cleared across several levels. Sellers hold control above 1.5100 area so far but how the rate trades into US news today will tell more. OK to buy if flat on a dip. Profit-taking likely to result in a squeeze on the further strength. Technical trade overnight as traders decide near-term action with little to go on but the charts. BOE rate cut next meeting increasingly likely but that is likely completely factored in at this point. Traders note liquidity is only moderate and still on the lower side. Aggressive traders can look to buy the next dip.
Data due Tuesday: All times EASTERN (-5 GMT)
4:30am GBP Construction PMI
7:01pm GBP Nationwide Consumer Confidence

EURO/USD Daily

Resistance 3: 1.3200
Resistance 2: 1.3120/30
Resistance 1: 1.3100
Latest New York: 1.2631
Support 1: 1.2600/10
Support 2: 1.2550
Support 3: 1.2480

Comments

Late break with spillover from GBP clears stops under the 1.2700 area. Possible reversal now in play but the rate needs to firm above the 1.2850 area in my view. Bids are building under the 1.2600 area as expected; sell-off likely to be bought hard now. OK to try the long side again on a dip. Traders note stops building above the market around the 1.2750 area in size likely to help create some two-way action but rate is well off those numbers to start. Support also from cross-spreaders as they unwind Yen. Rate is an absolute screaming buy in my view�I can�t see further weakness being ignored by the buyers. Traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market.
Data due Tuesday: All times EASTERN (-5 GMT)
5:00am EUR PPI 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.

[ForexPros]

Sign up for this afternoon’s FREE LIVE WEBINAR!!!
Understanding the limitations of Forex Technical Analysis
02-12-2008, 17:00 GMT
Jason Alan Jankovsky provides a deeper look into the theory of Technical Analysis…

Today�s US Dollar Trading

� USD holds gains against most pairs
� USD/JPY drops to low 93�s
� US data dismal, volumes drop

Overnight Preview

� Look for follow-on selling of USD/JPY on weaker equities
� USD still inside larger ranges

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
� All Day USD Total Vehicle Sales
� 12:30pm USD FOMC Member Plosser Speaks

Summary
Falling equities, weaker US economic data and fear of larger than expected rate cuts by the ECB and the ECB later this week kept the pressure on the majors today as GBP, EURO, Swissy and CAD gave back recent gains. Traders note stops were part of today�s trade but thin conditions remained a contributing factor likely making the moves a bit bigger than would normally be the case. Analysts are now expecting a full 100 BP rate cut by the BOE on Thursday this week and traders sold GBP across the board today. GBP fell through support at the 1.4950 area finding stops for a low print at 1.4805 before profit-taking by the shorts lifted the rate back to the 1.4900 area. GBP likely pressured EURO lower as well today but the more than $5.00/BBL drop in Crude Oil put the EURO on the defensive today. Low prints at 1.2581 are well above key support around the 1.2480 area and traders note that thin conditions likely would have exaggerated ranges today but the EURO remained fairly well supported to end above the 1.2600 area. USD/JPY was pressured by weak equities today and more losses are expected. Low prints at 93.04 are above the October lows but stops were in size traders say around the 93.50 area; high prints at 95.59 went unchallenged during US trade today. USD/CHF rallied but failed to make a new high and remains below resistance around the 1.2380 area; low prints at 1.2018 during US trade is on support in my view. Traders note that a close under the 1.2020 area likely to inspire additional pressure on the rate. USD/CAD high prints at 1.2529 failed to find large bids and the larger range may suggest more two-way action on the way; low prints at 1.2303 are under key S/R at 1.2425 area. If the rate can close under the 1.2425 area the rate will likely suffer a pullback. In my view, the USD is range-bound between large S/R levels and the majors will continue to suffer two-way action near-term. Should equities drop again overnight I see the USD/JPY finally reaching a double-bottom around the 92.60 area; additional USD strength in other pairs likely to stall at existing end of ranges as the underlying fundamentals are just dismal for the USD.

GBP/USD Daily

Resistance 3: 1.5680
Resistance 2: 1.5620
Resistance 1: 1.5550
Latest New York: 1.4889
Support 1: 1.4700/10
Support 2: 1.4650
Support 3: 1.4550

Comments

Rate forced lower to start the week after consolidating gains last week. Good bids reported but supply seen from semi-official names. Stops in range helps to pressure but support has failed at 1.5050 area. Traders note solid two-way action with stops cleared across several levels. Sellers hold control above 1.5100 area so far; US news today also adds weight. OK to buy if flat on a dip. Profit-taking likely to result in a squeeze on the further strength. Technical trade overnight as traders decide near-term action with little to go on but the charts. BOE rate cut next meeting increasingly likely but that is likely completely factored in at this point. Traders note liquidity is only moderate and still on the lower side. Aggressive traders can look to buy the next dip.
Data due Tuesday: All times EASTERN (-5 GMT)
4:30am GBP Construction PMI
7:01pm GBP Nationwide Consumer Confidence

EURO/USD Daily

Resistance 3: 1.3200
Resistance 2: 1.3120/30
Resistance 1: 1.3100
Latest New York: 1.2642
Support 1: 1.2580
Support 2: 1.2550
Support 3: 1.2480

Comments

Late break with spillover from GBP clears stops under the 1.2700 area and 1.2620/30 area. Possible reversal now in play but the rate needs to firm above the 1.2850 area in my view. Bids are building under the 1.2600 area as expected; sell-off likely to be bought hard now. OK to try the long side again on a dip. Traders note stops building above the market around the 1.2750 area in size likely to help create some two-way action but rate is well off those numbers to start. Support also from cross-spreaders as they unwind Yen. Rate is an absolute screaming buy in my view�I can�t see further weakness being ignored by the buyers. Traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market.
Data due Tuesday: All times EASTERN (-5 GMT)
5:00am EUR PPI m/m

Forex Analysis by: Forexpros.com - Written by Jason Alan Jankovsky

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

[ForexPros]

[B]Get excited for this afternoon’s live FREE webinar[/B] -
[I]How to determine the forex market cycles -Types of market move[/I]s
Wed, Dec 3, 2008, 13:00 GMT

Featuring Dr. S. Sivaramen of I-knowindices.

The webinar will cover the following topics:

* Varied volatile moves of the Forex market
* The extremes, moves and spikes
* Big players intentions
* Market sentiments and trap moves

[B]
Today�s US Dollar Trading[/B]

� USD recovers from early lows
� Two-way action driven by stops and cross-spreaders
� Equities and Oil volatility an issue
[B]
Overnight Preview[/B]

� Look for a quiet overnight session
� USD to stabilize ahead of US data in the morning

Looking Ahead to Wednesday
All times EASTERN (-5 GMT)
� 7:30am USD Challenger Job Cuts y/y
� 8:15am USD ADP Non-Farm Employment Change
� 8:30am USD Revised Nonfarm Productivity q/q
� 8:30am USD Revised Unit Labor Costs q/q
� 10:00am USD ISM Non-Manufacturing PMI
� 10:15am USD FOMC Member Kroszner Speaks
� 10:35am USD Crude Oil Inventories
� 2:00pm USD Beige Book

[B]Summary[/B]
Despite a weaker open and a test of near-term S/R the USD has recovered to post highs against some pairs as intraday volatility continues. Equities faded into the middle of the day unable to hold early gains helping to push the majors to lower prices in two-way volatility. Crude giving up gains also was a factor for lower EURO pricing traders say but for the most part the majors are struggling to hold support against negative sentiment as traders continue to wait for signs that the financial crisis is mitigating. GBP had early highs at 1.5072 before dropping two full handles in late trade; traders note selling sympathy with EURO and cross-spreaders adding to the volatility. EURO high prints looking for stops at 1.2767 but traders note they were not in size over the 1.2750 area suggesting that stops are higher up or that they were cleared last week making for a potential rotation lower in the works as the rate failed to advance past the weekly opening range. USD/CHF continued to sketch out a tight range failing to extend in either direction as early highs and lows held all day. Traders note that stops are likely building in size on both sides of the rate as other pairs extend ranges suggesting more volatility may be due soon. USD/CAD rallied through upside resistance for a high print at 1.2585 clearing stops above the 1.2540/50 area; traders note that uncertainty in the new Canadian government likely has pressured Loonie lower against the USD. Traders note that the rate has had really thin volume and today�s moves may have been exaggerated but the fact is the rate has extended above near-term resistance suggesting that the rate may try for the next resistance level above the 1.2700 area. In my view, today�s action is two-way within existing ranges with a few exceptions but volumes haven�t been that impressive. Most likely the USD is continuing to trade in a consolidation bias until Friday�s NFP report. Tomorrow�s data will likely provide a bit of volatility but I think the market is waiting to see the extent of the employment data this week. Look for the USD to quiet down overnight as the market prepares for US data in the morning.
[B]
GBP/USD Daily [/B]

Resistance 3: 1.5680
Resistance 2: 1.5620
Resistance 1: 1.5550
Latest New York: 1.4898
Support 1: 1.4770
Support 2: 1.4700/10
Support 3: 1.4650

[B]Comments[/B]

Rate forced lower into early Asia overnight but reverses into Europe. Analysts suggest 100 BP rate cut coming on Thursday; probably already fully factored in. Good bids reported but supply seen from semi-official names. Stops in range helps to pressure but support has failed at 1.5050 area. Traders note solid two-way action with stops cleared across several levels. Sellers hold control above 1.5100 area so far; OK to buy if flat on a dip. Profit-taking likely to result in a squeeze on the further strength. Technical trade overnight again. BOE rate cut increasingly likely but that is likely completely factored in at this point. Traders note liquidity is only moderate and still on the lower side. Aggressive traders can look to buy the next dip.
Data due Wednesday: All times EASTERN (-5 GMT)
4:30am GBP Services PMI
5:30am GBP BRC Shop Price Index y/y
[B]
EURO/USD Daily[/B]

Resistance 3: 1.2950
Resistance 2: 1.2880
Resistance 1: 1.2750/60
Latest New York: 1.2709
Support 1: 1.2580
Support 2: 1.2550
Support 3: 1.2480

[B]Comments[/B]

Late break with spillover from GBP clears stops under the 1.2700 area and 1.2620/30 area. Possible reversal now in play but the rate needs to firm above the 1.2850 area in my view. Bids are building under the 1.2600 area as expected; sell-off likely to be bought hard now. OK to try the long side again on a dip. Traders note stops building above the market around the 1.2750 area in size likely to help create some two-way action but initial try for stops misses with a high print at 1.2767. Support also from cross-spreaders as they unwind Yen. Rate is an absolute screaming buy in my view�I can�t see further weakness being ignored by the buyers. 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 (-5 GMT)
4:00am EUR Final Services PMI
5:00am EUR Retail Sales m/m

Forex Analysis 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.

[richemarks]

Daily Analysis will help In starting for everybody to undertand the position of the trading in the forex it will help.And should follow the tips from the forex trading experts and who are already running profits in forex trading we can share their ideas and views.Some information about the subJect is really useful to gain profits.And in the forex trading should get updated…

[ForexPros]

[B]Overnight Asia/Europe[/B]

� Early USD weakness gives way to strength
� Equities mixed, Oil firmer
� Speculation two-way on what will happen early in the year
[B]
Today�s Economic Reports[/B]
All times EASTERN (-5 GMT)
� 10:00am USD Construction Spending m/m
� All Day USD Total Vehicle Sales
� 1:15pm USD FOMC Member Yellen Speaks

[B]Looking Ahead to Tuesday[/B]
All times EASTERN (-5 GMT)
� 10:00am USD ISM Non-Manufacturing PMI
� 10:00am USD Pending Home Sales m/m
� 10:00am USD Factory Orders m/m
� 2:00pm USD FOMC Meeting Minutes

[B]Summary[/B]
The USD is on the offense this morning for the most part as the first full day of post-holiday trading gets underway in New York. Overnight was a mixed bag for the Greenback as early weakness in index futures put a bit of downward pressure on the USD/JPY and mixed pressure on EURO and Cable; thin conditions were reported in Asia as a half-day holiday was seen in Japan. The volumes remained thinner into European trade but the main focus was the EURO-Sterling cross as the rate corrected from lifetime highs late last year; rumors that a large investment house would need Cable to meet funding needs as well as repatriation by oil companies supported the GBP into early New York scoring a 1.4581 high print in late European action. EURO is lower of course trading through stops in the 1.3880 area and 1.3820/30 area before losing another two-full handles for a low print at 1.3623; traders note conditions remained thin as many players are sidelined ahead of economic news due out this week. Technical conditions remain mixed in EURO with some seeing the downside as the place to be on the back of a �top-ten trades of 2009� recommendation from GS suggesting EURO will make lows in �09 under the 1.2000 handle. In my view, that is a ridiculous point of view with US fundamentals so weak and a democrat due in the White House. Governors of five states have already called for a $1.0T USD stimulus package after the new administration takes office and my question is: �Where will the money come from?� In times like these it is an historical precedent that the USD weakens after a �honeymoon� rally once the new president takes office. In my view, the new president isn�t really qualified for the conditions he will have to face leaving the probabilities open for poor government actions which will make the situation more tenuous. USD/CHF rallied to the 1.1000 handle with a high print at 1.1085 as traders saw equities firm up and piggy-backing on USD/JPY strength overnight; traders note that stops were seen driving some trade as the rate broke above the 1.0900 handle. Overnight lows at 1.0706 in Asia are likely to remain in place for a few days as the rate is technically ready to try for the 1.1230 area in my view but I would be a seller up there. USD/JPY rallied as aggressive traders continue to work near-term technical�s; high prints at 93.41 in early New York as stops and short-covering were the rule overnight. Analysts remind that the rate is due for a modest correction after making new 2008 lows during the holiday season suggesting that once a short-squeeze is done the rate will work lower. Some desks report Japanese offers in the current area layered from 92.80 to 93.60 also suggesting the pressure will be from the sell side soon enough. In my view, the USD is off to a great two-way start to the year as the markets await what will happen during the first quarter with economic conditions as they are. Look for the Greenback to continue two-way this week.

[B]GBP/USD Daily
[/B]

Resistance 3: 1.5800/10
Resistance 2: 1.5780
Resistance 1: 1.5710/20
Latest New York: 1.4490
Support 1: 1.4420/30
Support 2: 1.4350
Support 3: 1.4280

[B]Comments[/B]

Rate is two-way and firmer due to cross-spreaders liquidating EURO-Sterling; repatriation also lending to the firm tone. Rate is likely to have a knee-jerk reaction to more rate cuts due later in the week but with a new 2008 low late in the month last month the probabilities are good that any rate cut is factored in. Rate sees upside stops cleared around the 1.4550 area in light trade but no follow-through as of yet. Toolbox signals a trend sell as active from late in December likely running out of steam around the 1.4400 area so if holding shorts be nimble. Spillover from EURO not there today as spreaders unwind. Traders note solid two-way action. Sellers hold control above 1.5500 area so far but if unable to make a new low or test the low�expect a short-squeeze…
Data due Tuesday: All times EASTERN (-5 GMT)
2:00am GBP Nationwide HPI m/m
4:30am GBP Services PMI
7:01pm GBP Nationwide Consumer Confidence

[B]EURO/USD Daily [/B]

Resistance 3: 1.4080
Resistance 2: 1.4020/30
Resistance 1: 1.3960
Latest New York: 1.3583
Support 1: 1.3550
Support 2: 1.3480
Support 3: 1.3420/30
[B]
Comments[/B]

Rate drops to new lows in early New York today, aggressive liquidation by EURO-Sterling cross spreaders likely providing the main selling. Late longs are under pressure and can�t ignore a break of the 50% fib defense numbers. Bears took a stand at 1.4700 area last year and likely won�t let go of shorts until technical levels are tested around 1.3660 area or lower which we have today. Technical traders will be looking for a test of the 100 day MA near-term to offer support this time after blowing through to the upside. Traders note lots of aggressive active buying getting disappointed. Stops building under 1.3440 area likely in size; the question is will the buyers show up? Traders note some stops within range overnight suggesting longs are late or nervous. Correction lower is likely to continue a bit further but that will likely be a buy point.
Data due Tuesday: All times EASTERN (-5 GMT)
4:00am EUR Final Services PMI
5:00am EUR CPI Flash Estimate y/y

[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.

[ForexPros]

[B]Overnight Asia/Europe[/B]

� USD firmer overnight
� Stops seen in most pairs lifted USD
� Liquidation of GBP crosses continues
[B]
Today�s Economic Reports[/B]
All times EASTERN (-5 GMT)
� 10:00am USD ISM Non-Manufacturing PMI
� 10:00am USD Pending Home Sales m/m
� 10:00am USD Factory Orders m/m
� 2:00pm USD FOMC Meeting Minutes

[B]Looking Ahead to Wednesda[/B]y
All times EASTERN (-5 GMT)
� 7:30am USD Challenger Job Cuts y/y
� 8:15am USD ADP Non-Farm Employment Change
� 10:30am USD Crude Oil Inventories

[B]Summary[/B]
The USD is better against most major pairs this morning as traders unwound EURO-Sterling and Yen pairs giving the Greenback a boost by default some desks report. Stops were driving trade as the USD crossed several important S/R levels overnight; most notably in EURO as the rate fell through stops at 1.3500, 1.3440, and 1.3390 for a low print at 1.3330. Traders report that semi-official demand was seen under the 1.3400 handle but the rate is not responding higher at this point as liquidation from the non-USD pairs continues. Aggressive traders can look to buy EURO under the 1.3300 handle as key support starts coming in around the 1.3280 area in my view. GBP is holding the 1.4600 handle after low prints at 1.4548 continued another inside range low for the rate; highs at 1.4737 are just under yesterday�s highs suggesting that the rate is meeting some selling despite the buying to liquidate GBP crosses. Aggressive traders can buy GBP anytime on weakness in my view; most likely a test of the 1.4500 handle. USD/JPY rallied as shorts continued to get squeezed; high prints at 94.24 in late European trade. Stops were seen above the 93.50 area as expected and Japanese exporters continue to offer strength traders say. In my view, the rate is due to resume falling off but there is still residual short-covering possible so I would be a cautious bear above the 94.00 area. USD/CHF rallied higher as gold weakened again overnight; although the metal is still firmer about the $800/OZ. level trader perception is that a continued fall in the metal will rally the USD against Swiss. In my view, the high print at 1.1257 in early New York trade is follow-on buying from aggressive European trade and likely to fade as intraday longs run out of momentum. In my view, today�s USD strength is technical follow-on from Monday�s firmer start combined with liquidation from non-USD pairs. I don�t think the Greenback has what it takes to continue a prolonged advance and see this action as simple range-trade after last month�s high volatility. I would look to sell USD strength near-term and like the buy side of EURO under the 1.3300 area.

[B]GBP/USD Daily [/B]

Resistance 3: 1.4950
Resistance 2: 1.4880
Resistance 1: 1.4740
Latest New York: 1.4556
Support 1: 1.4420/30
Support 2: 1.4350
Support 3: 1.4280

[B]Comments[/B]

Rate is two-way and firmer due to cross-spreaders liquidating EURO-Sterling; repatriation also lending to the firm tone. Rate is likely to have a knee-jerk reaction to more rate cuts due later in the week but with a new 2008 low late in the month last month the probabilities are good that any rate cut is factored in. Rate sees upside stops cleared around the 1.4680 area overnight putting the next level resistance around 1.4780 in play. Toolbox signals a trend sell as active from late in December likely running out of steam around the 1.4400 area so if holding shorts be nimble. Spillover from EURO not there today as spreaders unwind. Traders note solid two-way action. Sellers hold control above 1.5100 area so far but if unable to make a new low or test the low�expect a short-squeeze…
Data due Wednesday: All times EASTERN (-5 GMT)
5:30am GBP BRC Shop Price Index y/y

[B]EURO/USD Daily [/B]

Resistance 3: 1.4080
Resistance 2: 1.4020/30
Resistance 1: 1.3960
Latest New York: 1.3338
Support 1: 1.3300
Support 2: 1.3250/60
Support 3: 1.3200
[B]
Comments[/B]

Rate drops to new lows overnight as cross-liquidation continues. Aggressive liquidation by EURO-Sterling cross spreaders providing the main selling but traders note lots of stops active under the 1.3400 area. Late longs are under pressure and can�t ignore a break of the 50% fib defense numbers. Bears took a stand at 1.4700 area last year and likely have reached technical levels around the 1.3300 area so expect some firmness in this area. Traders note lots of aggressive active buying getting disappointed. Stops building under 1.3440 area likely in size; the question is will the buyers show up? Traders note some stops within range overnight suggesting longs are late or nervous. Correction lower is likely to continue a bit further but that will likely be a buy point.
Data due Wednesday: All times EASTERN (-5 GMT)
2:00am EUR ECB President Trichet Speaks
3:55am EUR German Unemployment Change
5:00am EUR PPI m/m

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

[lmorgan099]

Thank you very much for this information it really help me to know how to develop a daily analysis and by the way its useful to understand the market movement, more in these days of volatility. I started trading with just one pair USD/EURO, so your comments are useful for me.

[ForexPros]

Glad for the positive feedback Imorgan 099! Were always happy to receive reviews from our readers.

[ForexPros]

[B]Today�s US Dollar Trading[/B]

� USD reverses from early highs, makes lows in some pairs
� Equities better but USD/JPY fails to gain
� Technical objectives met
[B]
Overnight Preview[/B]

� Look for more two-way action
� Should be quiet ahead of US data in the morning

[B]Looking Ahead to Wednesday[/B]
All times EASTERN (-5 GMT)
� 7:30am USD Challenger Job Cuts y/y
� 8:15am USD ADP Non-Farm Employment Change
� 10:30am USD Crude Oil Inventories
[B]
Summary[/B]
The USD started the day on a strong note rising to early highs against most pairs in New York but has since falling back to make lows in some cases. Traders note that today�s US data was as expected and showed no real surprises suggesting that today�s action was driven by technical factors more so than sentiment. Most pairs met technical objectives for S/R during the past 24 hours or so lending some credibility to the argument. GBP continued to firm making highs against the EURO and the USD; climbing to a high print at 1.4994 and holding near the highs. Euro-Sterling cross traders continued to see liquidation and that rate traded to lows late in New York trade adding more upside pressure to GBP. EURO remained under pressure all day but rallied after the fix to make a try for the upper end of the range; high prints at 1.3660 remained unchallenged but the rate rallied over the 1.3520 area after making lows only six hours earlier at 1.3312. traders note that volumes were OK and sovereign or official bids were seen into the lows earlier in the day. Despite better stock prices and the DJIA making highs late in the day USD/JPY was unable to hold gains as expected; high prints in early New York at 94.65 gave way to aggressive selling and the rate gave up the 94.00 handle and remains near 93.70/80 into the end of the day. Traders note that offers were think from smart money above the 94.00 area suggesting that the failure at the 50 day MA was large hands adding to shorts. In my view, the USD has little chance of maintaining a strong upward trend against the Yen through 2009 so today�s technical failure simply underscores the current USD weakness. USD/CHF also failed to hold early gains falling back from high prints at 1.1281 to trade the 1.1160/70 area; traders note the rate has a technical resistance area around the 1.1280/1.1320 area suggesting that sellers are turning aggressive near that area. Traders also expect a rally in Gold prices to add downward pressure to the pair. USD/CAD continues to weaken making low prints at 1.1759 but failing to find solid stops in size. Buyers showed up and that pair rallied back to the 1.1800 handle for now. Traders warn a pullback could get ugly if US fundamentals remain poor through the end of month and the BOC keeps rates firm. In my view, the USD is set to continue in volatile two-way action so traders with open trade gains from today�s reversals need to remain nimble; we will likely cover a lot of the same ground twice.

[B]GBP/USD Daily [/B]

Resistance 3: 1.5100
Resistance 2: 1.5050
Resistance 1: 1.4990
Latest New York: 1.4960
Support 1: 1.4420/30
Support 2: 1.4350
Support 3: 1.4280
[B]
Comments[/B]

Rate is two-way and firmer due to cross-spreaders liquidating EURO-Sterling; repatriation also lending to the firm tone. Rally to highs during New York today likely some stops and short-squeeze. Rate is likely to have a knee-jerk reaction to more rate cuts due later in the week but with a new 2008 low late in the month last month the probabilities are good that any rate cut is factored in. Rate sees upside stops cleared overnight putting the next level resistance around 1.5050/1.5100 in play. Spillover from EURO not there today as spreaders unwind. Traders note solid two-way action. Sellers hold control above 1.5100 area so far but if unable to make a new low or test the low�expect a short-squeeze…
Data due Wednesday: All times EASTERN (-5 GMT)
5:30am GBP BRC Shop Price Index y/y
[B]
EUR/USD Dail[/B]y

Resistance 3: 1.3740/50
Resistance 2: 1.3700
Resistance 1: 1.3660
Latest New York: 1.3526
Support 1: 1.3300
Support 2: 1.3250/60
Support 3: 1.3200

[B]Comments[/B]

Rate drops to new lows overnight as cross-liquidation continues but rallies back hard as official bids absorb offers under the 1.3350 area. Aggressive liquidation by EURO-Sterling cross spreaders providing the main selling but traders note lots of stops active under the 1.3400 area. Late longs are under pressure and can�t ignore a break of the 50% fib defense numbers. Bears took a stand at 1.4700 area last year and likely have reached technical levels around the 1.3300 area so expect some firmness in this area. Traders note some stops within range overnight suggesting longs are late or nervous. Correction lower is likely to continue a bit further but that will likely be a buy point.
Data due Wednesday: All times EASTERN (-5 GMT)
2:00am EUR ECB President Trichet Speaks
3:55am EUR German Unemployment Change
5:00am EUR PPI m/m
Analysis by: Forex | Forex Trading | Currency Trading | Forex Brokers - 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.

[lmorgan099]

Hello ForexPro, what have happened with your daily analysis, I�m used to check them and learn everyday from them. I�m looking forward for seeing your comments again. Do you have your own blog or page for me to visit?.

[annetterozen]

Glad to have another happy customer! You can check us out on our forex portal at Forex | Forex Trading | Currency Trading | Forex Brokers.

[annetterozen]

[B]Today�s US Dollar Trading[/B]

� USD starts better in Asia, gives back gains in New York
� Some whipsaw seen on light stops and thin conditions
� Most eyes focused on FOMC tomorrow
[B]
Overnight Preview[/B]

� Look for continued sideways action
� Should get quiet ahead of FOMC tomorrow
[B]
Looking Ahead to Wednesday [/B]
All times EASTERN (-5 GMT)
� 10:30am USD Crude Oil Inventories
� 2:15pm USD FOMC Statement
� 2:15pm USD Federal Funds Rate
� Day 1 ALL WEF Annual Meetings
[B]
Summary[/B]
The USD is continuing in two-way action as the majors continue to consolidate off their weekly lows; traders note conditions remain thin and the lack of US fundamentals are keeping some sidelined ahead of the FOMC rate announcement tomorrow. After early gains in the Greenback overnight better-than-expected overseas data helped to hold the GBPO and the EURO higher although both pairs looked for new lows in early New York but reversed losses to close better on the day as early intraday shorts covered back as the day wore on. Better US equities prices helped to support EURO as well keeping the rate off the lows into the close. GBP overnight lows went unchallenged in New York trade at 1.3928 but the rate followed EURO lower as EURO made new lows at 1.3118 but spent very little time on the lows rallying back to trade the 1.3180 area for most of the day. High prints in GBP at 1.4245 remained unchallenged in New York making the day a net higher day but off the highs to finish 1.4140 area. USD/JPY had a more rangey day topping out at 90.08 overnight and making lows in New York at 88.42 only to finish about unchanged on the day. Traders note that volumes were thin everywhere and despite better tone of stocks no one wanted to get on the buy side in size today. Technical trade in USD/CHF continued to define near-term direction as the rate failed to extend in either direction today with lows at 1.1312 overnight and highs at 1.1437 with a mid range close; traders say concern over SNB potential intervention is keeping a base under the markets but note that stops are building under the 1.1280 area to the downside and about 1.1480 on the upside making for potential whipsaw. Same story in USD/CAD in thin conditions as well; high prints at 1.2335 during New York with a drop back to unchanged on the day after lows in Asia at 1.2150; large range today mostly due to thin conditions traders say. For the most part today was a point of indecision for the USD; highs failed to attract buyers and lows found no sellers. Stops in all pairs were light and likely residual suggesting short-term time frame traders active with big players sidelined ahead of more news due later this week. Look for the Greenback to continue sideways and consolidate tonight; volumes should remain light and most traders will be focused on FOMC in the afternoon Wednesday.
[B]
GBP USD Daily [/B]

Resistance 3: 1.4380
Resistance 2: 1.4300
Resistance 1: 1.4250
Latest New York: 1.4176
Support 1: 1.3550
Support 2: 1.3500/10
Support 3: ?

[B]Comments[/B]

Rate rallies to resistance at the 1.4250 area and falls back to leave a huge wick. Holds lows so far but a reversal could be in the works if the sort-squeeze is over. Light stops seen on the move over the 1.4100 area as late shorts get squeezed. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Stops and aggressive selling drive the rate to a 23.0 year low last week. Short-squeeze likely in progress after first attempt to rally was sold back but recovers. Overnight economic news seen as positive; rate trading on technical�s now that a pullback from the 1.4250 area is in the works. Signs of the bottom may be showing up as �smart� buyers reported in GBP Wednesday and Thursday night last week. Spillover from EURO likely but modest. Look for two-way action into this bottom. A short-covering rally is increasingly likely now. Late sellers likely in or hurting.
Data due Wednesday: All times EASTERN (-5 GMT)
NONE
[B]
EUR USD Daily [/B]

Resistance 3: 1.3420
Resistance 2: 1.3380
Resistance 1: 1.3320/30
Latest New York: 1.3206
Support 1: 1.3030
Support 2: 1.2950
Support 3: 1.2880
[B]
Comments[/B]
Rate follows GBP higher; scores highs overnight Europe but fails into early New York. Recovers late in the day suggesting short-term players on the short side covering back. Rally less volatile and the rate holds tech resistance at 1.3325/30 area overnight. Rally all day today suggests a short-squeeze is in the works; fall back argues the squeeze is over. Stops around 1.3030 area likely under the market. More likely in-range but probably cleared on the pullback from highs. Bulls are attempting to find a bottom. 50 bar MA failed now likely to offer resistance and a close above suggests the bottom will be in. Semi-official and sovereign bids and offers seen last week. Technical levels around the 1.3300 area now likely to offer resistance so expect two-way action and consolidation. Aggressive traders can look to buy the next dip.
Data due Wednesday: All times EASTERN (-5 GMT)
2:00am EUR GfK German Consumer Climate
All Day EUR German Prelim CPI m/m

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

[annetterozen]

[B]Today�s US Dollar Trading[/B]

� USD starts weak and reverses
� FOMC announcement initially seen as positive
� Stops seen driving trade

[B]Overnight Preview[/B]

� Look for USD to hold gains and consolidate
� Volumes should be lighter
[B]
Looking Ahead to Thursday[/B]
All times EASTERN (-5 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
� 10:30am USD Natural Gas Storage
� Day 2 ALL WEF Annual Meetings

[B]Summary[/B]

After dropping dramatically overnight and into early New York the USD has reversed to hold gains across the board against the majors. Most traders note that volumes dropped off significantly ahead of the FOMC rate announcement suggesting that most were sidelined ahead of the statement. Analysts are divided as to the exact meaning of the statement; some suggest that the Fed stands ready to do �whatever it takes� to resolve the economic crisis while others say the Fed appears a bit panicky in view of interest rates at near-zero unable to add positive stimulus so far. In my view, the issue still remains short-sighted at best and long-term solutions will be hard to enact with a financial community wanting a quick fix. As such, any Fed action will likely be short-lived and deepen the potential for recession; however at first blush the equities markets like the FOMC announcement and the USD is responding higher. GBP high prints at 1.4378 attracted sellers today with the rate dropping back to trade at the 1.4200 handle and looking like a reversal to test recent lows is in play. Traders note that LHS interest at the fix was largely ignored in thin conditions but sellers are currently active. EURO fared no better with high prints at 1.3329 ahead of FOMC; reversing hard to trade the 1.3100 area after the announcement. LHS interest was also reported in EURO suggesting that everybody kept their powder dry until the afternoon. Low prints at 1.3103 are still ahead of deeper support suggesting follow-on selling is due in Asia tonight. USD/JPY found close-in stops as expected above the 90.10 area for a high print at 90.76 before dropping back; traders note that technical resistance at 90.80 area appears to have held the advance suggesting that the stop-driven rally will need some active buying soon to extend into stops rumored to be at or near the 91.00 handle. Traders note that a short-squeeze is overdue and argue that today was an upside breakout from near-term resistance at the 90.00 handle. USD/CHF found stops above the previous support level at 1.1480 and continued to advance after the FOMC action; high prints at 1.1568 with lows still from overnight at 1.1329 suggesting the rate will try for resistance at the 1.1650 area again. USD/CAD found stops under the 1.2150/60 area early in the day for a low print at 1.2023 before rallying after FOMC; New York highs back over the 1.2200 handle are back above the previous support area suggesting that if the rate holds above the 1.2180 area into the close a rally may be in the works. Look for the USD to consolidate gains with an upward bias; more data due this week likely will be USD-negative so expect whipsaw and sell rallies.
[B]
GBP USD Daily [/B]

Resistance 3: 1.4420
Resistance 2: 1.4380
Resistance 1: 1.4330/40
Latest New York: 1.4210
Support 1: 1.4120
Support 2: 1.4050
Support 3: 1.3980

[B]Comments[/B]

Rate rallies to resistance at the 1.4330 area and corrects back after FOMC; USD appears to like the news but GBP holds support ahead of the close. Holding 23 year lows so far and a pullback likely to be bought so expect whipsaw. Light stops seen on the move over the 1.4250 area as late shorts get squeezed but big move still coming. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short-squeeze likely in progress after first attempt to rally was sold back but recovers. Rate trading on technical�s now. Signs of the bottom may be showing up as �smart� buyers reported in GBP Wednesday and Thursday night last week. Spillover from EURO likely but modest. Look for two-way action into this bottom. A short-covering rally is increasingly likely now. Late sellers likely in or hurting.
Data due Thursday: All times EASTERN (-5 GMT)
2:00am GBP Nationwide HPI m/m
12:00pm GBP MPC Member Blanchflower Speaks
7:01pm GBP GfK Consumer Confidence

[B]EUR USD Daily [/B]

Resistance 3: 1.3420
Resistance 2: 1.3380
Resistance 1: 1.3320/30
Latest New York: 1.3137
Support 1: 1.3030
Support 2: 1.2950
Support 3: 1.2880

[B]Comments[/B]

Rate follows GBP higher; scores highs overnight Europe but fails into early New York. Rate then follows GBP lower on correction but major support at 1.3030 still the key. Rally less volatile and the rate holds tech resistance at 1.3325/30 area overnight. Rally all day today suggests a short-squeeze is in the works; fall back argues the squeeze is over. Stops around 1.3030 area likely under the market. More likely in-range but probably cleared on the pullback from highs. Bulls are attempting to find a bottom. 50 bar MA failed now likely to offer resistance and a close above suggests the bottom will be in. Semi-official and sovereign bids and offers seen last week. Technical levels around the 1.3300 area now likely to offer resistance so expect two-way action and consolidation. Aggressive traders can look to buy the next dip.
Data due Thursday: All times EASTERN (-5 GMT)
3:55am EUR German Unemployment Change
4:00am EUR M3 Money Supply y/y
4:00am EUR Private Loans y/y
5:00am EUR Consumer Confidence

Analysis by:Forexpros.com - 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.

[annetterozen]

Overnight Asia/Europe

� USD opens flat and two-way in Asia, firms into Europe
� Traders note technical action for the most part
� Volumes light, stops noted, crosses again active

Today�s Economic Reports
All times EASTERN (-5 GMT)
� 9:59am USD Existing Home Sales
� 10:00am USD CB Leading Index m/m

Looking Ahead to Tuesday
All times Eastern (-5 GMT)
� 10:00am USD Pending Home Sales m/m
� All Day USD Total Vehicle Sales

Summary
It is a mixed start for the USD this morning as the Chinese markets are back after the extended Lunar New Year celebrations; the Greenback is better against EURO, GBP, CHF and CAD but softer against JPY to start the month. Although trading was light to start Asia, technical follow-on buying from Friday saw the majors start losing ground steadily into early Europe; below-expectations UK CBI data helped pressure GBP into early lows around the 1.4230 area with traders saying a failure at the key support area of 1.4250 to extend losses. GBP making lows in early New York at 1.4093 with noted sellers active on the GBP crosses. EURO is also weaker after posting early highs in Asia at 1:2800 before turning lower to find stops under the 1.2750 area; low prints at 1.2707 found buyers at the technical level of 1.2720 and the rate is firm into early New York around the 1.2760 area. Traders expect support at 1.2720 to offer at least a slight bounce and note that both EURO and GBP are on or near technical support and have corrected recent strength to long-term fib defense areas suggesting that long-timeframe traders may be interested on the buy side soon. Aggressive traders can buy EURO under the 1.2750 area in my view. USD/CHF is firmer to start the week, high prints in Asia at 1.1689�again at technical resistance. Traders note that offers extend above the 1.1700 area into the 1.1750 area and suggest that the upside may be limited for the week. Low prints at 1.1599 continue to be above the 1.1580 area where large stops are likely building. USD/CAD high prints at 1.2405 were also at near-term resistance between 1.2380 and 1.2420; aggressive traders can look to sell the rate above the 1.2400 area in my view. Lows at 1.2257 overnight make for a larger range than most pairs suggesting more volatility in this pair near-term so be nimble on positions. USD/JPY continued to trade in a tight range ahead of New York, high prints at 90.02 were offered as has been the case the past several sessions; traders saying that as long as 90.50/60 area holds on a closing basis the rate will likely remain stuck. Low prints at 88.80 are right on technical support with bids said to be layered into the 88.50 area suggesting more coiling action is likely. In my view, the majors are starting the week inside range and driven by technical areas; news from the US today and tomorrow is light and traders note the Greenback appears to be drifting more so than being actively accumulated. Expect S/R to hold near-term and the majors to remain range bound within existing highs and lows. I don�t expect the USD to make a break out one way or the other for a few days.

GBP/USD Daily

Resistance 3: 1.4250
Resistance 2: 1.4180
Resistance 1: 1.4100
Latest New York: 1.4077
Support 1: 1.3980
Support 2: 1.3920
Support 3: 1.3880

Comments
Rate drops back after an up week last week; likely a correction and a buying opportunity as the 23 year lows are very likely to hold. Last week�s Blanchflower comments help underscore the rate on dips but that support didn�t show this morning. Possibly unwinding of GBP crosses pressuring the rate above the 1.4300 handle. Light stops seen on the move under 1.4250 with likely active selling dropping into new lows at this writing. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short-squeeze taking a break; need sharp rally after this dip to argue for continued upside. Rate trading on technical�s now. Signs of the bottom may be showing up as �smart� buyers reported in GBP last week. Spillover from EURO likely but modest. Look for two-way action into this bottom. A short-covering rally is increasingly likely now. Late sellers likely in or hurting.
Data due Tuesday: All times EASTERN (-5 GMT)
4:30am GBP Construction PMI

EUR/USD Daily

Resistance 3: 1.2920
Resistance 2: 1.2850
Resistance 1: 1.2820
Latest New York: 1.2756
Support 1: 1.2700/10
Support 2: 1.2650
Support 3: 1.2620

Comments
Rate follows GBP lower, cross-spreaders likely pressure as crosses are unwound during the day. One-way action overnight in light volume as stops get triggered under 1.2750 area and below but sellers run out on support at the 1.2700 handle. Major resistance is now back at 1.3030 area and a close back above there argues for another test of the 1.3300 area weekly highs. Downside bias may be running out as rate is now on solid support numbers around the 1.2700/20 area. Pullback argues the squeeze is over. Bulls are still attempting to find a bottom. 50 bar MA failed now likely to offer resistance and a close above suggests the bottom will be in. Technical levels around the 1.3300 area now likely to offer resistance so expect two-way action and consolidation. Aggressive traders can look to buy the next dip.
Data due Tuesday: All times EASTERN (-5 GMT)
2:00am EUR German Retail Sales m/m
5:00am EUR PPI m/m

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.

[ForexPros]

Today�s US Dollar Trading

� USD whipsaws around fundamentals, vote of no confidence
� Majors extend ranges in violent trade
� Volumes remain thin but volatility is huge

Overnight Preview

� Look for more two-way action, USD likely to whipsaw
� Majors likely to test S/R in Asia

Looking Ahead to Wednesday
All times Eastern (-5 GMT)
� 8:30am USD Trade Balance
� 9:50am USD FOMC Member Duke Speaks
� 10:00am USD Treasury Sec Geithner Speaks
� 10:30am USD Crude Oil Inventories
� 1:30pm USD FOMC Member Evans Speaks
� 2:00pm USD Federal Budget Balance

Summary
Extreme volatility and more two-way action was the rule today as the major pairs whipsawed between highs and lows several times creating havoc for traders across the board. Weaker equities pricing in response to Tres. Sec. Geithner�s plan to bail-out the banking sector suggests that USD bulls are not convinced that the plan will work. Geithner�s plan was long on rhetoric and short on concrete plans suggesting that more rhetoric will be needed before the trading community swallows the plan; apparently the government believes the more it talks the more work gets done. Big movers today were the USD/CHF and the GBP; Swissy rallied to a high overnight at 1.1783 before breaking lower and making a low print after the London fix at 1.1503; traders note stops under the 1.1470 area in size helped to break the rate lower. GBP fell off its highs from around the 1.4880 area and gradually sold-off until liquidating stops around the 1.4750 area fired off; the rate fell to a low print at 1.4456 making a range of five handles on the day. Trader�s note that in all pairs the volumes were thin but that didn�t stop technical trade at all. Dropping to low prints in New York USD/JPY fell to 90.12 testing the technical breakout seen during the short-covering rally last week; lack of follow-through higher likely encouraged a round of selling and a close under the 90.50 area likely to encourage more outright selling in my view. Traders note that stops were in �range and more likely under the 90.00 handle. USD/CAD rallied to a high print at 1.2495 after dropping like a brick to the 1.2147 area; first stops one way and then the other kept trades on their toes through the session. Additionally, the rate was attracting technical buyers on a potential close back above the 50 day MA; likely more bids to be seen but the USD is very two-sided and the rally is potentially a bull trap. EURO had a repeat performance from yesterday; high prints at 1.3076 above the 1.3030 area but then fell back hard to push under the 1.2880 area for a low print at 1.2808. Traders note the rate was taking cues from GBP and cross-spreaders and likely more losses are on the way with a second close under the 1.3030 area. IN my view, today�s volatility and whipsaw underscore how nervous the markets are. Today�s news from the US and the vote of no confidence seen in the first view minutes suggest more volatility is brewing. Look for continued two-way action, big ranges and more whipsaw.

GBP/USD Daily

Resistance 3: 1.5000/10
Resistance 2: 1.4980
Resistance 1: 1.4920/30
Latest New York: 1.4484
Support 1: 1.4320
Support 2: 1.4250/60
Support 3: 1.4200

Comments

Rate two-way again overnight, opens New York better but reverses into new lows late after Geithner remarks. Technical trade the rule to start the week with cross-spreaders holding GBP firm. Rate needs to hold above 1.4700 area to keep bulls happy. Statement suggests that the BOE is not happy with a lower GBP. Traders note stops and active buying above the 1.4480 area and the rate rallies to highs above 1.4930 area. Tech resistance now at 1.5000 area likely to cap near term but stops are building above and the 1.5000 handle is a big psychological number. 23 year lows are very likely to hold on any break. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Rate trading on technical�s now. Spillover from EURO likely but modest.
Data due Wednesday: All times EASTERN (-5 GMT)
4:30am GBP Claimant Count Change
4:30am GBP Average Earnings Index 3m/y
4:30am GBP Unemployment Rate
5:30am GBP BOE Gov King Speaks
5:30am GBP BOE Inflation Report

EUR/USD Daily

Resistance 3: 1.3080
Resistance 2: 1.3020/30
Resistance 1: 1.2990/1.3000
Latest New York: 1.2872
Support 1: 1.2750
Support 2: 1.2700
Support 3: 1.2680

Comments

Rate follows GBP higher and clears stops above the market and scores the 1.3000 handle mid-day but fails into the close; likely spillover from weakness in GBP. Stops and active buying over the 1.3040 area traders say; those were the late buyers I think. Rate appears to be ready to close on the 1.2900 handle; holding 1.2980 area in early New York. Aggressive sellers likely to try and cap above key 1.3030 area; failure to hold 1.2900 today likely to signal a further break back to 1.2700. The dip is a buy opp but be nimble. Cross-spreaders likely pressure as crosses are unwound. Close above 1.3030 needed for further upside until then rallies likely to be sold into support around 1.2620/30 (?).Bulls are still attempting to find a bottom. 50 bar MA failed now likely to offer resistance and a close above suggests the bottom will be in. Technical levels around the 1.2920/50 area now likely to offer resistance so expect two-way action and consolidation underneath.
Data due Wednesday: All times EASTERN (-5 GMT)
2:00am EUR German Final CPI m/m

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