Daily Analysis Thread

[ForexPros]

Today�s US Dollar Trading

� Whipsaw the rule; USD ends off the highs
� Volumes light, conditions thinner
� Traders note sovereign interest in EURO on dips

Overnight Preview

� Look for the Greenback to continue two-way
� Expect volatility

Looking Ahead to Thursday
All times Eastern (-5 GMT)
� 8:30am USD Core Retail Sales m/m
� 8:30am USD Retail Sales m/m
� 8:30am USD Unemployment Claims
� 10:00am USD Business Inventories m/m
� 10:30am USD Natural Gas Storage

Summary
The USD continues to trade mixed today after US data failed to inspire traders one way or the other. GBP fell to a new traded low of 1.4315 before reversing back to the 1.4370 area in lighter volumes; cross-spreaders continue to work the sell side of the rate into the New York close. Overnight UK data was also benign and remarks somewhat dovish but the rate remains firm on the 1.4300 handle ahead of more US data tomorrow. Traders expect more two-way action near-term so aggressive traders looking to buy the dip under the 1.4380 area remember to be nimble. EURO was unable to score a new low-print in afternoon trade and remained mired around the 1.2880 area after testing both sides of that zone; offers above the 1.2910 area capped the upside while bids around 1l2850 supported. Traders note that the rate is inside range and off the weekly lows ahead of the end of week looking very much like a technical bottom may be in for the end of week. If the lows for the week are in look for a test of the 1.3050 area near-term as the bottoming effect may attract bids on dips. Traders also note official and sovereign bids on the dip into the lows overnight. USD/CHF failed to hold gains on the 1.1600 handle; high prints at 1.1635 in thin volume followed by a dip under the 1.1580 area. Overnight lows continue to hold around the 1.1500 area but a test of stops around the 1.1480 area looks inevitable after today�s failure to hold the 1.1600 handle. USD/JPY held the top half of the range today making a bid for the 90.80 area but failing just under; highs at 90.77 went offered during New York trade and the rate drifted lower. Closing around 90.50 area certainly looks like the rate will continue two-way but aggressive traders can look to sell the rate around the 90.80 area as the upside is on light volume. Rounding out the day on the defensive was USD/CAD; high prints at 1.2535 overnight went unchallenged during US trade topping out around the 1.2510 area before heading south. Lows at 1.2386 remained unchallenged but into the end of day the rate is down to the 1.2410 area suggesting the rate is losing upside momentum. Look for the USD/CAD to test the 1.2200 handle again before the end of week. In my view, the USD is setting up for another try for the low end of the range. Expect high volatility and whipsaw but also for the USD to end lower on the week.

GBP/USD Daily
Resistance 3: 1.4700/10
Resistance 2: 1.4650
Resistance 1: 1.4580
Latest New York: 1.4369
Support 1: 1.4320
Support 2: 1.4250/60
Support 3: 1.4200

Comments
Rate two-way again overnight, opens New York lower and holds into next level of support around the 1.4320/30 area. Technical trade the rule to start the week with cross-spreaders on the sell side of GBP overnight. Rate needs to hold above 1.4700 area to keep bulls happy. BOE King suggests quantitative easing is on the way; traders see this as bearish. Traders note stops and active selling as the rate drops back to 1.4480 area suggesting that is becoming a pivot 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 Thursday: All times EASTERN (-5 GMT)
NONE

EUR/USD Daily
Resistance 3: 1.3080
Resistance 2: 1.3020/30
Resistance 1: 1.2990/1.3000
Latest New York: 1.2884
Support 1: 1.2750
Support 2: 1.2700
Support 3: 1.2680

Comments
Rate holds firm while other rates whipsaw; clears more stops close-in above the market from sellers yesterday on failure to hold 1.3030. 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; fails into end of day but holds inside range day. 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 Thursday: All times EASTERN (-5 GMT)
4:00am EUR ECB Monthly Bulletin
5:00am EUR Industrial Production m/m
1:00pm EUR ECB President Trichet Speaks

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.

[ForexPros]

Today�s US Dollar Trading

� TICS shows coverage, weak Empire fails to discourage USD bulls
� USD holds gains but volumes are lower
� Majors hold key support initially

Overnight Preview

� Look for more two-way action
� Volumes likely to be light ahead of US data tomorrow

Looking Ahead to Wednesday
All times Eastern (-5 GMT)
� 8:30am USD Building Permits
� 8:30am USD Housing Starts
� 8:30am USD Import Prices m/m
� 9:15am USD Capacity Utilization Rate
� 9:15am USD Industrial Production m/m
� 2:00pm USD FOMC Meeting Minutes

Summary
The USD continued to climb overnight but stalled off the highs in New York showing some signs of topping again as the long-awaited government �stimulus� bill failed to encourage investors today. At this writing President Obama is signing into law a record spending bill that has serious flaws and serious short-sighted programs in my view which will lead to a breakdown in economic recovery and a protracted recession/depression. Proponents of the bill suggest that spending will help the economy recover faster but many analysts and traders doubt that the method of investment will have little lasting effect. Only history will tell if today was the beginning of a faster economic recovery for the US. Despite weaker equities and better-than-expected overseas data the majors retreated to their worst levels of the day in early New York trade before cutting losses to finish above what many consider to be key support. Cable fell to a low print at 1.4122 overnight and those lows went unchallenged in New York despite a brief show under the 1.4200 handle; the rate began a steady recovery to hold back above the previous 1.4250 support level and is in the top 50% of the day�s range. EURO dropped into stops said to be resting at the 1.2650 area and below for a low print at 1.2561 in thin conditions; traders note that during the break semi-official and some possible sovereign bids were seen into the 1.2590 area absorbing offers to close back above the 1.2600 handle. USD/JPY held gains above the 92.00 handle after overnight highs at 92.77 went unchallenged in New York ending around the 92.40 area; traders note that political influence from Secretary of State Clinton�s visit to Asia may help lift the USD a bit but expect heavy sell interest ahead of 93.00 area suggesting the rate may have a hard time joining the lift seen elsewhere. USD/CHF stalled at the monthly double-top at the 1.1780 area for a high print at 1.1781 before retreating a full handle back to the 1.1680 area late in the day; traders note that higher gold prices may be underpinning CHF putting the USD on the defense into the end of the week. Analysts note that today�s close is below yesterday�s highs suggesting that the USD may have put in highs for the week despite the strong showing early. USD/CAD held above the 1.2600 handle after a high print at 1.2676 and looks set to challenge the 1.2700 handle overnight but if the Greenback fails to rally overnight traders expect heavy stops in the 1.2580 area from longs set this week. In my view, the USD is stalling again at resistance and without better news from the US this week it is likely the majors will recover into New York tomorrow. Look for more two-way action overnight ahead of US housing data tomorrow.

GBP/USD Daily

Resistance 3: 1.4700/10
Resistance 2: 1.4650
Resistance 1: 1.4600/10
Latest New York: 1.4259
Support 1: 1.4250/60
Support 2: 1.412030
Support 3: 1.4000
Comments

Rate falls back to next support level at 1.4130 area but bounces on large names on the bid. Traders note technical action continues. Rate needs to return to the 1.4500 area fairly fast and a close above 1.4700 area to keep bulls happy near term. Traders note stops and active selling as the rate drops back under 1.4320 area Monday again; 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 MPC Meeting Minutes
6:00am GBP CBI Industrial Order Expectations

EUR/USD Daily

Resistance 3: 1.3080
Resistance 2: 1.3020/30
Resistance 1: 1.2990/1.3000
Latest New York: 1.2604
Support 1: 1.2790/1.2600
Support 2: 1.2550/60
Support 3: 1.2500
Comments

Rate drops through support Monday and Tuesday to a multi-week low; traders report large names absorbing offers ahead of 1.2600 and slightly below suggesting a potential buy point. Rate fails to hold firm on the 1.2900 handle but dips appear to be a test of support rather than a move lower so far. Aggressive sellers likely to try and cap above key 1.3030 area; failure to hold 1.2900 likely to signal a further test of the lows but be patient. 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)
NONE
Analysis by Forexpros.com - Written by Jason Alan Jankovsky

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

[ForexPros]

Today�s US Dollar Trading

� USD mixed to start Asia, firms in Europe
� BOK sells USD to support WON
� Stops in-range in most pairs, tech trading dominates

Today�s Economic Reports
� USD holds gains against most pairs, stops and two-way action
� Equities fail at key support
� US data weaker again

Overnight Preview

� Look for continued two-way action
� USD to weaken into mid-week

Looking Ahead to Tuesday
All times Eastern (-5 GMT)
� 8:00am USD FOMC Member Lockhart Speaks
� 10:00am USD Fed Chairman Bernanke Testifies
� 10:00am USD Pending Home Sales m/m
� All Day USD Total Vehicle Sales

Summary
The USD holds on to gains as lower equities and falling Gold prices pushed investors into flight-to-quality instruments lifting USD to better levels against most major pairs. The one exception is USD/JPY which has failed to extend gains for a second day; high prints overnight at 97.92 went unchallenged in New York as did lows at 96.90 but the rate spent most of the day under the 97.50 area making today an inside range day with a neutral close. Traders note that dips near the 97.00 handle were met with quality bids but the lack of upside follow-through suggests that the rate is topping and due for a deeper correction. Most analysts point out that the USD DX is at a three year high on lighter volume suggesting also that the USD is near a top near-term. Should the USD/JPY break into stops said to be resting between 96.50 and 96.80 area there could be a sharp break pulling all the USD pairs lower. GBP fell through stops under the 1.4020 area finding a low print at 1.3955 before rallying out of the hole to trade a full handle higher in late New York around the 1.4070 area suggesting that shorts are still likely to get squeezed. Should the rate score overnight gains near the 1.4300 handle there is a good chance that upside stops have been rolled down closer to the market. EURO is holding firm above low prints at 1.2544 just under the 1.2600 handle into the close suggesting that shorts could get squeezed as well; traders note that large bids were seen but liquidity was still thin. Both the ECB and the BOE hold regular meetings this week Thursday on interest rates with most analysts suggesting that a 50 BP rate cut by either back in well-factored into current pricing. Should the EURO and the GBP hold today�s lows by mid-week a �buy the rumor/sell the fact� scenario could develop with both rates adding to the upside to finish the week. US data due this week is heavily focused on NFP data Friday suggesting that poor US news to end the week may discourage the USD bulls after a solid advance to end February. USD/CHF is holding gains in thin volume with high prints at 1.1798 unchallenged in New York but a test of the 1.1701 lows was seen; the rate finishes mid range at the 1.1750 area making today one of the best closes of the year but analysts remind that the best close of the year was followed by a sharp 400 point break only a week or so ago. If the rate is setting up as it did then it would be reasonable to expect lower action by mid-week. USD/CAD continued to advance as weak Canadian GDP data suggested more room to the upside scoring a high print at 1.2911; aggressive traders need to be ready to sell the rate on any advance above the 1.2920 area near-term. In my view, the USD is continuing to set-up a top. US fundamentals continue to worsen and flight-to-quality can�t continue forever. Look for more two-way action and be ready to sell rallies.

GBP/USD Daily

Resistance 3: 1.4380
Resistance 2: 1.4300/10
Resistance 1: 1.4250
Latest New York: 1.4052
Support 1: 1.4020/30
Support 2: 1.3950

Comments
Rate tests support in NY at 1.3950 area; shorts are gaining confidence for a break under 1.4000. Rally to clear close in stops above 1.4300 and a close over the handle suggest more upside and a short-squeeze; today�s break to lows likely put�s that scenario on hold. Two-way action between existing S/R the past 72 hours likely to continue. Stops likely building on both sides increasing the chance for whipsaw. Traders report stops in-range adding for two-way action. Long-term 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 with initial support now at 1.3900 in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom.
Data due Tuesday: All times EASTERN (-5 GMT)
4:30am GBP Construction PMI
7:01pm GBP Nationwide Consumer Confidence
[B]

EURO/USD Daily[/B]

Resistance 3: 1.2780
Resistance 2: 1.2720
Resistance 1: 1.2650
Latest New York: 1.2578
Support 1: 1.2550
Support 2: 1.2500
Support 3: 1.2480

Comments
Rate follows GBP lower and cross-spreading likely adding pressure; rate holds a test of 1.2550 area but rally is needed to hold support zone otherwise another low is likely. Stops building on both sides as the rate tests for stops on the downside first. Upside stops likely now rolled down to the 1.2630/50 area for now; likely layered through 1.2750 area. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. 100 day MA falling to key resistance area of 1.3030 area by next week likely to add to overhead resistance. Technical levels around the 1.2920/50 area now likely to offer resistance so expect two-way action and consolidation underneath.
Data due Tuesday: All times EASTERN (-5 GMT)
2:00am EUR German WPI m/m
12:30pm EUR ECB President Trichet Speaks

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

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

[ForexPros]

Today�s US Dollar Trading

� USD whipsaws in two-way action, ends flat
� Yen above the 98.00 handle in light trade
� Stops in range drive action both ways

Overnight Preview

� Look for the USD to continue consolidating
� Majors setting up for a rally in my view

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
� 10:00am USD ISM Non-Manufacturing PMI
� 10:00am USD Treasury Sec Geithner Speaks
� 10:30am USD Crude Oil Inventories
� 12:00pm USD FOMC Member Lockhart Speaks
� 2:00pm USD Beige Book

Summary
The USD is ending today flat to weaker after whipsawing traders all day in both directions; speculation regarding US stimulus actions and upcoming fundamentals is providing both sides with fuel for their argument. After starting weaker in Asia the USD rallied into New York action today extending highs against most pairs by the London fix. Into the afternoon as equities also went two-way the Greenback retreated from highs in most pairs giving bulls a reason to lighten up. GBP low prints in New York were 1.3982 before rallying a full handle higher to end the day back in the 1.4080 area after reaching the 1.4100 handle briefly in the morning. Traders note that sovereign bids were seen near the lows in both GBP and EURO suggesting that dips are attracting large names as support holds. EURO suffered a similar fate and tracked the GBP lower to extend losses into a 1.2520 low print before rallying back to the 1.2600 handle briefly before settling back to the 1.2580 area; traders note that stops in-range helped to push the rate into lows but dips were bought as shorts covered and possibly new longs entered. USD/JPY extended gains to the 98.00 handle but encountered strong headwinds at the 98.50 area only able to lift to a high print at 98.61 before dropping back. Traders note model accounts active above the 98.00 handle again as they were last week suggesting late buying. The rate closes New York above the 98.00 handle will likely encourage additional buying but sellers are willing into the highs. USD/CHF rallied as well but failed to extend into the 1.1800 handle topping out at 1.1791 before dropping back to the 1.1750 area making the second close above the 1.1700 handle in the past three days suggesting bids are willing on dips but traders note volumes were again on the low side. USD/CAD rallied to a 1.2977 high print in post-London fix action but was unable to hold the 1.2900 handle in late New York dropping to the 1.2880 area in thin conditions. Across the board volatility remained high and the majors covered a lot of the same ground twice; traders remind that there are several market-moving fundamentals due up the next few days and more two-way action is likely. In my view, the budget hearing and testimony from the children currently babysitting the US economy only serve to confuse the fortunes of the USD. Today�s focus on what the Treasury Secretary had to say only serves to increase the reluctance of the average investor to make a move. Until that changes the underlying fundamentals for the USD will continue to weaken. At some point the dam will burst as holders of USD for reasons that have nothing to do with investment are forced to liquidate. I think the USD is setting up for a massive reversal; get ready for a major shift in sentiment.

GBP/USD Daily

Resistance 3: 1.4380
Resistance 2: 1.4300/10
Resistance 1: 1.4250
Latest New York: 1.4069
Support 1: 1.4020/30
Support 2: 1.3950
Support 3: 1.3900

Comments
Rate rallies overnight then falls back to test support in NY again, low prints at 1.3982 above major bids said to be around 1.3950 area; shorts are gaining confidence for a break under 1.4000. Rally to clear close in stops above 1.4300 and a close over the handle suggest more upside and a short-squeeze; bounce off the lows back to 1.4080/90 area suggests bids are increasing. Two-way action between existing S/R the past 72 hours likely to continue. Stops likely building on both sides increasing the chance for whipsaw. Traders report stops in-range adding for two-way action. Long-term 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 with initial support now at 1.3900 in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom.
Data due Wednesday: All times EASTERN (-5 GMT)
4th-6th GBP Halifax HPI m/m
4:30am GBP Services PMI
5:30am GBP BRC Shop Price Index y/y

EUR/USD Daily

Resistance 3: 1.2780
Resistance 2: 1.2720
Resistance 1: 1.2680
Latest New York: 1.2584
Support 1: 1.2520
Support 2: 1.2500
Support 3: 1.2480

Comments
Rate follows GBP lower and cross-spreading likely adding pressure; rate holds a test of 1.2520 area again but rally is needed to hold support zone otherwise another low is likely. Stops building on both sides as the rate tests for stops on the downside first. Upside stops likely cleared at 1.2630/50 area for now; likely layered above 1.2680 through 1.2750 area now. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. 100 day MA falling to key resistance area of 1.3030 area by next week likely to add to overhead resistance. 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)
4:00am EUR Final Services PMI

Analysis by Forexpros.com - Written by Jason Alan Jankovsky

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

[ForexPros]

Overnight Asia/Europe

� USD gaps lower in Asia, rallies in Europe
� Two-way technical action, stops drive trade
� Traders note cross-spreaders in GBP active

Today�s Economic Reports
All times EASTERN (-4 GMT)
� NONE

Looking Ahead to Tuesday
All times Eastern (-4 GMT)
� 7:30am USD Fed Chairman Bernanke Speaks
� 9:00am USD IBD/TIPP Economic Optimism
� 9:00am USD Wholesale Inventories m/m

Summary
The USD is higher this morning after a slow start on the defense in Asia, the majors making the best levels of the day ahead of European trade. The Greenback is making fresh highs against the majors in early New York as technical trade and cross spreaders pressure to the upside. Overnight equities markets were lower adding to the upside as well. The big mover this morning is GBP dropping through several levels of technical support finding stops layered underneath recent lows as EURO/GBP traders sell the GBP side of the cross. Stops under 1.4050 and 1.4000 area gave way to a test of the 1.3950 area and stops were larger on the dip traders say suggesting that lots of bulls came to the table near the 1.4000 area last week. Low prints in GBP at 1.3874 dropping the rate to levels not seen since last year; high prints at 1.4185 in the Asian session. EURO is testing the downside as well, low prints at 1.2573 with highs at 1.2726 and traders note stops under the 1.2620 area and tech support holding initially at 1.2580 area. Cross-spreaders on the buy side supporting into the dip traders say but it is still under pressure with large names and semi-official buyers usually active at these levels but no reports of such buying as yet. USD/JPY high prints at 99.18 with exporters active into the Asian highs above 98.50 traders say; volumes have been light with stops in-range lifting the pair over the 99.00 area. The rate is expected to meet headwinds above the 99.00 area most think but warn that a test of the 200 day MA around the 100.00 area can�t be ruled out. USD/CHF is back on the 1.1600 handle with highs at 1.1654; lows at 1.1533 attracting technical buying off the 100 day MA. Traders note that the EURO/CHF cross active on the buy side today after reports that a SNB governor mentioned that the Swiss Franc is �being constantly monitored� suggesting that intervention is a possibility but most traders see that as unlikely. USD/CAD is also higher lifting into stops above the 1.2880 area for high prints at 1.2939; the rate is holding the 1.2900 handle in light trade in early New York but offers are expected to be heavy on any further advance. Stops in all pairs likely to drive trade during the day as technical levels intraday have likely attracted both sides so a whipsaw in the Greenback can�t be ruled out. With the USD�s propensity to cover the same ground twice daily the past few weeks it would be reasonable for USD bears to sell into this overnight action; high volatility is a usual thing when a market is at a potential turning point and in my view the USD is simply remaining in two-way trade into its recent highs once again. With a light economic calendar due through tomorrow I would expect more two-way technical action and I would look to sell rallies in the Greenback. Today�s closing levels will likely be more significant into tomorrow�s action so if we get a neutral close in the USD today I would look for a rotation lower for Tuesday.

GBP/USD Daily

Resistance 3: 1.4440
Resistance 2: 1.4380
Resistance 1: 1.4300/10
Latest New York: 1.3870
Support 1: 1.3850
Support 2: 1.3820
Support 3: 1.3780/90

Comments

Rate follows-on lower on stops under the 1.4050 area in size, cross-spreaders selling the GBP side of the spreads. Buy point around 1.4000 area in my view. Reversal off weekly highs a negative technical; is it a bear trap? Likely an upside rally is still in the works but the rate needs to hold the 1.4000 area with some confidence early this week. Middle East names likely on the bid on this dip but no confirm yet. Traders report stops in-range adding for two-way action. Long-term 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 with initial support now at 1.3900 in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short squeeze may be on hold.
Data due Tuesday: All times EASTERN (-4 GMT)
4:30am GBP Manufacturing Production m/m
4:30am GBP Industrial Production m/m
7:01pm GBP NIESR GDP Estimate

EURO/USD Daily

Resistance 3: 1.2780
Resistance 2: 1.2750
Resistance 1: 1.2720
Latest New York: 1.2580
Support 1: 1.2550/60
Support 2: 1.2480
Support 3: 1.2450

Comments

Rate follows GBP in two-way action, holding support now at 1.2550 area once again. Aggressive traders can add to open longs on this dip. Cross-spreaders supporting rate as GBP drops. Stops building on both sides as the rate tests for stops on the downside first. Upside stops likely building in the 1.2630/50 area again, overhead resistance at 1.2720 area now with stops likely the other side. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. 100 day MA falling to key resistance area of 1.3030 area by next week likely to add to overhead resistance. Technical levels around the 1.2920/50 area now likely to offer resistance so expect two-way action and consolidation underneath.
Data due Tuesday: All times EASTERN (-4 GMT)
2:00am EUR German Trade Balance
2:00am EUR German Final CPI m/m
2:45am EUR French Industrial Production m/m
2:45am EUR French Gov Budget Balance
2:45am EUR French Trade Balance
5:00am EUR PPI m/m
Join us for the Morning FOREX Briefing daily at 7:45 AM 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.

[ForexPros]

[B]Today�s US Dollar Trading[/B]

� USD lower in Asia, firms into New York and holds
� New highs in CAD but USD ends mixed
� Traders note solid bids in some pairs on the dip

[B]Overnight Preview[/B]

� Look for more two-way technical action
� USD is due for a correction

[B]Looking Ahead to Tuesday [/B]
All times Eastern (-4 GMT)
� 7:30am USD Fed Chairman Bernanke Speaks
� 9:00am USD IBD/TIPP Economic Optimism
� 9:00am USD Wholesale Inventories m/m

[B]Summary[/B]
The USD is holding gains into the end of New York trading today after solid two-way action overnight put the Greenback on the offensive into this morning. Rising to new weekly highs against GBP and yearly highs against CAD; other major pairs remain range-bound and inside-range. Traders note that cross-spreaders for GBP pairs kept Sterling on the defense all day putting in a low print at 1.3741 before stabilizing back on the 1.3800 handle for most of the day. Investor confidence remains weak to start the week as equities remained under pressure and traders note some flight to quality buying of USD was seen but remind that the Greenback is over-bought in the near-term. With high bullish consensus among traders it is hard to see the USD continuing to climb without some sort of a correction and traders note that in most pairs a �buy the dip� mentality is in play. EURO tracked GBP lower for low prints at 1.2555 before rallying back to the 1.2660 area and edges lower to the 1.2620/30 area into the end of day; overnight high prints at 1.2728 remained unchallenged in New York. USD/CHF failed again at the 1.1680 area; high print at 1.1683 before retreating under the 1.1600 handle but lows at 1.1533 remain unchallenged on the day making the USD/CHF lower and inside range on the day near the end of day. Traders continue to remain fearful of possible intervention by the SNB but most traders see that as remote. USD/CAD was the big winner on the day rallying through stops over the 1.3000 area for a high print of 1.3066 before backing off a full handle later in the day; the rate is attracting a sizable amount of flight-to-quality buyers but traders remind that the multi-year highs are going to be a tempting area for sellers and how the rate performs to end the week may set the stage for a near-term top. Canadian payrolls due Friday may provide some ending fireworks to the week and if the rate can�t close above the 1.3000 handle the next day or two a long-liquidation break may be brewing. USD/JPY followed USD strength elsewhere and rose to a high print in New York at 99.20 before dropping back to the 98.70 area; traders note a lot of exporter selling was absorbed above the 98.50 area and many are looking for a test of the weekly highs around the 99.60 area. Above there are likely stops but the big number will be the 200 day MA around the 100.00 area. In my view, the Greenback is continuing to show signs of a top in my view; overwhelming bullish sentiment but a failure to make highs across the board make for a suspect rally today. Look for more two-ay technical action overnight as the calendar remains thin for news. Aggressive traders can look to the sell side of USD the next 24 hours or so.
[B]
GBP/USD Daily [/B]

Resistance 3: 1.4440
Resistance 2: 1.4380
Resistance 1: 1.4300/10
Latest New York: 1.3780
Support 1: 1.3740/50
Support 2: 1.3700
Support 3: 1.3650

[B]Comments[/B]

Rate follows-on lower on stops under the 1.4050 area in size, cross-spreaders selling the GBP side of the spreads. Buy point around 1.4000 area in my view. Reversal off weekly highs a negative technical; is it a bear trap? Likely an upside rally is still in the works but the rate needs to hold the 1.4000 area with some confidence early this week. Middle East names likely on the bid on this dip but no confirm yet. Traders report stops in-range adding for two-way action. Long-term 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 with initial support now at 1.3900 in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short squeeze may be on hold.
Data due Tuesday: All times EASTERN (-4 GMT)
4:30am GBP Manufacturing Production m/m
4:30am GBP Industrial Production m/m
7:01pm GBP NIESR GDP Estimate

[B]EURO/USD Daily[/B]

Resistance 3: 1.2780
Resistance 2: 1.2750
Resistance 1: 1.2720
Latest New York: 1.2600
Support 1: 1.2550/60
Support 2: 1.2480
Support 3: 1.2450
[B]
Comments[/B]

Rate follows GBP in two-way action, holding support now at 1.2550 area once again. Aggressive traders can add to open longs on this dip. Cross-spreaders supporting rate as GBP drops. Stops building on both sides as the rate tests for stops on the downside first. Upside stops likely building in the 1.2630/50 area again, overhead resistance at 1.2720 area now with stops likely the other side. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. 100 day MA falling to key resistance area of 1.3030 area by next week likely to add to overhead resistance. Technical levels around the 1.2920/50 area now likely to offer resistance so expect two-way action and consolidation underneath.
Data due Tuesday: All times EASTERN (-4 GMT)
2:00am EUR German Trade Balance
2:00am EUR German Final CPI m/m
2:45am EUR French Industrial Production m/m
2:45am EUR French Gov Budget Balance
2:45am EUR French Trade Balance
5:00am EUR PPI 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

[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]Today�s US Dollar Trading[/B]

� USD weakens in early New York, rallies to end the day
� Traders note unexpected action and stops driving trade
� Volumes lighter on the rally, volatility likely scares off some traders
[B]
Overnight Preview[/B]

� Look for the USD to remain two-way
� Technical action likely as well
[B]
Looking Ahead to Wednesday [/B]
All times Eastern (-4 GMT)
� 10:30am USD Crude Oil Inventories
� 2:00pm USD Federal Budget Balance

[B]Summary[/B]
It was a wild ride in the major pairs today as the USD fell sharply ahead of the New York open only to reverse hard and make highs in some pairs ahead of the close; traders note that participants were caught �wrong footed� after the New York open and stops from late longs in some pairs liquidated trades done expecting a higher close in the majors. Despite a 300 point rally by the DJIA today the USD continued to attract buyers after the London fix but traders note that the rally in at least two pairs was on thinner volume possibly exaggerating the moves. USD/JPY rallied back to the break-down point of 98.80 area after posting lows at 97.89 in early trade narrowly missing large stops said to be resting under the 97.80 area; no doubt today�s recovery will encourage some follow-on buying overnight by technical traders but offers are said to be heavy on the approach to the previous week�s highs near the 99.60 area with more said to be ready ahead of 100.00 area of the 100 day MA. USD/CHF was the big mover on the day making monthly lows at 1.1432 before rallying to make new highs on the day at 1.1647 and holding the 1.1600 handle into the close; traders note large stops in-range driving the pair to highs and note that CTA-type accounts active on the buy side of USD. USD/CAD ended lower on the day but not before bouncing off 1.2724 to recover back to the 1.2880 area of former stops. Offers are still expected on any further strength to the 1.2920/50 area. GBP fell through in-range stops cleared overnight to the upside that were set during the day making a mess of balance sheets both ways; traders note that low prints at 1.3688 were completely unexpected by most desks and attracted possible sovereign interest after the London fix. The rate recovered back to unchanged after highs in early New York at 1.3907 resulted in profit-taking but no one expected a complete reversal traders say. EURO held the bar for the majors remaining on the plus side all day despite a stop-driven move to the downside from high prints at 1.2823; overnight lows at 1.2578 remained untouched but the rate did drop to technical support at the 1.2620 area before recovering modestly back to the 1.2650 area. Across the board the volatility was huge and traders are still scratching their heads over the retreat seen during the day. Analysts will need to reevaluate potential in both directions because both highs and lows were significant from both the bulls and bears perspective. In any case, the volatility is increasing which will likely put many players on the sidelines for a short-time until things become more clear as to near-term price action. In my view, more USD whipsaw is to be expected ahead of another light economic calendar tonight and into tomorrow. Look for the recent action to drop off noticeably overnight and a rise in equities likely will keep the USD two-way into tomorrow�s trade.
[B]
GBP/USD Daily [/B]

Resistance 3: 1.4250
Resistance 2: 1.4220
Resistance 1: 1.4150
Latest New York: 1.3740
Support 1: 1.3650/60
Support 2: 1.3600/10
Support 3: 1.3500/10
[B]
Comments[/B]

Rate whipsaws hard, both sides get hurt as stops cleared first to the upside and then to the downside putting the 23 year lows in sight. Reversal off weekly highs a negative technical; Likely an upside rally is still in the works but the rate needs to rebound hard to wash-out the shorts again. After today�s action I think both sides will take a break. Traders report stops in-range adding for two-way action. Long-term 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 with long-term support at 1.3500 area now in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short squeeze may be on hold.
Data due Wednesday: All times EASTERN (-4 GMT)
5:30am GBP Trade Balance

[B]EUR/USD Daily[/B]

Resistance 3: 1.2780
Resistance 2: 1.2750
Resistance 1: 1.2720
Latest New York: 1.2652
Support 1: 1.2550/60
Support 2: 1.2480
Support 3: 1.2450

[B]Comments[/B]

Rate follows GBP in two-way action, holding support now above the 1.2600 area once again. Aggressive traders can add to open longs on this dip but BE CAREFUL as volatility is just huge. Test of today�s lows likely at this point but traders note big names on the buy side on dips under the 1.2600 and 1.2620 area. Cross-spreaders supporting rate as GBP drops. Upside stops likely building in the overhead resistance at 1.2720/30 area now with stops likely the other side. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. 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 (-4 GMT)
3:00am EUR German PPI m/m
7:00am EUR German Factory Orders m/m

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

Analysis by: 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.

[ForexPros]

[B]Today�s US Dollar Trading[/B]

� USD volatility continues but majors hold gains
� S/R tested and some pairs hold
� Stops seen in USD/JPY and a weak close

[B]Overnight Preview[/B]

� Look for follow-on selling of USD overnight
� USD is still forming a top

[B]Looking Ahead to Thursday[/B]
All times Eastern (-4 GMT)
� 8:30am USD Core Retail Sales m/m
� 8:30am USD Retail Sales m/m
� 8:30am USD Unemployment Claims
� 10:00am USD Business Inventories m/m
� 10:00am USD Treasury Sec Geithner Speaks
� 10:30am USD Natural Gas Storage

[B]Summary[/B]
Volatility was the rule again today but USD action was not as pronounced as yesterday�s whipsaw and the USD ended mixed against the majors to finish New York today. Most of the majors ended after testing important S/R areas and finishing the other side suggesting that the USD is continuing to top around current levels. Ending near the highs after a pullback during the day was GBP and EURO. GBP rallied to hold the 1.3800 handle after scoring highs at 1.3841 suggesting that the low-volume dip to the 1.3550 area overnight was a bear-trap. Further upside is likely if the rate can score the 1.3900 handle mid-week as the rate is overdue for a short-squeeze in my view. EURO rallied to a high print at 1.2817 where offers ahead of 1.2820 area capped initially; the rate fell back on short-selling to the 1.2740 area but regained the 1.2800 handle late in the session and holds in the 1.2790 area at this writing. Both GBP and EURO held important support overnight and extended highs during the day suggesting that although weekly highs are still higher in both pairs stops are likely from late shorts at or near the weekly highs in both pairs. USD/JPY found stops under the 97.80 area as expected and more at the 97.50 area; low prints initially at 97.17 before rallying to the 97.70 area but then fell off again for low prints at 97.02 clearing more stops from longs set on the dip; traders note that macro accounts were selling on the break most likely covering longs set earlier above the 98.50 and 99.00 area. USD/CHF is holding off the 100 day MA around the 1.1550 area with low prints at 1.1538 making for an inside range day; traders note that non-USD pairs for CHF also under selling pressure today suggesting that CHF is due for a further rally. USD/CAD is the sole pair better on the day with late high prints at 1.2905 before backing off a bit to the 1.2880 area; lows at 1.2749 missed stops said to be resting under the 1.2750 area and traders expect a further decline in the USD will likely pressure the rate lower overnight. In my view, the USD is continuing to sketch-out a top in current ranges. With USD/JPY making a low-close for the month today there are solid signs that the sentiment near-term is shifting to a pullback of some type. With more posturing and little action from government officials combined with a short-covering rally developing in equities the USD will likely suffer more selling as late longs bail and wait for a drop before trying the long side again; I think the bull side will be tougher going to end the week so aggressive traders can sell USD on rallies.
[B]
GBP/USD Daily [/B]

Resistance 3: 1.4050
Resistance 2: 1.4000
Resistance 1: 1.3920
Latest New York: 1.3885
Support 1: 1.3650/60
Support 2: 1.3600/10
Support 3: 1.3500/10

[B]Comments[/B]

Rate two-way and recovers after a marginal new low into support overnight. 23 year lows in sight but the rate is attracting bids. Reversal off weekly lows a positive technical but the volume needs to come up and I think the shorts have yet to bail as a group. Likely an upside rally is still in the works but the rate needs to rebound hard to wash-out the shorts again. After yesterday�s action I think both sides will take a break. Traders report stops in-range adding for two-way action. Long-term 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 with long-term support at 1.3500 area now in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short squeeze back on the board I think.
Data due Thursday: All times EASTERN (-4 GMT)
5:30am GBP Consumer Inflation Expectations
6:00am GBP CB Leading Index m/m
2:30pm GBP MPC Member Barker Speaks
[B]
EUR/USD Daily[/B]

Resistance 3: 1.2920
Resistance 2: 1.2880
Resistance 1: 1.2820
Latest New York: 1.2857
Support 1: 1.2550/60
Support 2: 1.2480
Support 3: 1.2450

[B]Comments[/B]

Rate follows GBP in two-way action, holding support now above the 1.2720 area. Aggressive traders can add to open longs on this dip but BE CAREFUL as volatility is just huge. Test of today�s lows likely at this point but traders note big names on the buy side on dips under the 1.2600 and 1.2620 area. Upside stops likely cleared at the overhead resistance at 1.2720/30 area now with stops likely the other side. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. Technical levels around the 1.2920/50 area now likely to offer resistance so expect two-way action and consolidation underneath.
Data due Thursday: All times EASTERN (-4 GMT)
3:45am EUR French CPI m/m
3:45am EUR French Final Non-Farm Payrolls q/q
5:00am EUR ECB Monthly Bulletin
6:00am EUR PPI m/m
7:00am EUR German Industrial Production m/m
7:30am EUR ECB President Trichet Speaks
Join us for the Afternoon US Dollar Wrap-Up daily at 3:15 pm Central/Chicago time (GMT -6)
Analysis by Forexpros 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.

[ForexPros]

Overnight Asia/Europe

� USD starts firm in Asia, weakens into Europe
� G-20 seen as a disappointment
� Volumes light and technical trade continues

Today�s Economic Reports
All times EASTERN (-4 GMT)
� 8:30am USD Empire State Manufacturing Index
� 9:00am USD TIC Long-Term Purchases
� 9:15am USD Capacity Utilization Rate
� 9:15am USD Industrial Production m/m
� 1:00pm USD NAHB Housing Market Index

Looking Ahead to Tuesday
All times Eastern (-4 GMT)
� 8:30am USD Building Permits
� 8:30am USD PPI m/m
� 8:30am USD Core PPI m/m
� 8:30am USD Housing Starts

Summary
The USD is mixed to open New York today after starting mildly better in Asia overnight; traders note initial disappointment from the G-20 meeting which announced nothing new and appeared to be simply a re-hash of the current economic situation created a brief push higher for the Greenback. After testing previous resistance levels across the board the USD began a slide through European trade and is weak at the start of New York with the exception of USD/JPY. The rate is still holding the 98.00 handle after testing the 98.50 area of reported supply with stops noted above but offers continue to hold the rate back into an inside-range day so far. Traders note firmer equities were adding a bit of lift to the pair but overall volumes are light. High prints at 98.51 with lows on support at 97.54; option expiries today may be helping to hold the rate around 98.00 area. USD/CHF is lower with lows at 1.1809 and holding 1.1820 area in early New York; high prints at 1.1915 were offered by technical traders in light volume. Should the rate fail to hold the 1.1800 handle the next 24 hours I think a case can be made that the rally to 1.1970 was a false break-out as there has been no follow-through. USD/CAD is weaker holding 1.2660 area after low prints at 1.2643; traders note stops under the market were around the 1.2650 area but bids supported suggesting buyers are still there on dips. High prints at 1.2797 were under the 1.2820 resistance area suggesting more technical trade in the pair. EURO has rallied steadily overnight with high prints in early New York at 1.3047 triggering stops above the weekly high around 1.2960 area with aggressive buyers helping the rate firm above the 1.3000 area; traders note large names on the bid on the dips suggesting more accumulation. Aggressive traders can look to lighten up on open longs for a possible correction from the 1.3030 area. GBP high prints at 1.4232 lifting to overhead resistance around 1.4250 before falling back a bit; traders note cross-spreaders for GBP crosses adding to the upside momentum. If the rate can hold above 1.4200 analysts suggest a test of the 1.4400 area is in view. In my view, the USD continues to work on a top but with the major pairs now trading at or through overhead initial resistance a correction would be reasonable to expect. Aggressive traders can sell a rally in the USD this week if economic news is seen as USD-supportive; I don�t think the Greenback has enough bid interest to hold onto this 3-year high. Flight-to-quality buying is beginning to lighten up as progress is being made on the economic issues and sentiment is beginning to change. Although the economic solutions probably won�t make a real difference in the long run I think the perception that work is getting done is helping to alleviate fear and panic buying of USD. Look for the Majors to continue two-way but pullbacks should be brief and hold above support areas.

GBP/USD Daily

Resistance 3: 1.4350
Resistance 2: 1.4320
Resistance 1: 1.4250
Latest New York: 1.4170
Support 1: 1.3860
Support 2: 1.3780
Support 3: 1.3720

Comments
Rate holds gains and makes new high overnight; stops seen above weekly highs around the 1.4050 area. Tests support on the 1.3800 handle and attracts solid bids traders say. Lows likely remain secure. Reversal off weekly lows a positive technical but the volume needs to come up and I think the shorts have yet to bail as a group. Traders report stops in-range adding for two-way action. Long-term 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 with long-term support at 1.3500 area now in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short squeeze back on the board I think.
Data due Tuesday: All times EASTERN (-4 GMT)
5:30am GBP DCLG HPI y/y
4:10pm GBP BOE Gov King Speaks

EUR/USD Daily

Resistance 3: 1.3100
Resistance 2: 1.3080
Resistance 1: 1.3050
Latest New York: 1.3035
Support 1: 1.2850
Support 2: 1.2720
Support 3: 1.2680

Comments
Rate follows GBP in two-way action, holding support now above the 1.2880 area. Upside stops triggered on the move over 1.2950/60 area with new buying coming in above 1.3000 area. Overhead resistance is thick up to 1.3100 area so a pullback might be in the works. Aggressive traders can liquidate some longs above 1.3000 area and hold base positions. Traders note big names on the buy side on dips overnight; semi-officials buying 1.2900 area. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. Technical levels around the 1.2920/50 area now likely to offer resistance so expect two-way action and consolidation underneath.
Data due Tuesday: All times EASTERN (-4 GMT)
6:00am EUR German ZEW Economic Sentiment
6:00am EUR ZEW Economic Sentiment
3:15pm EUR ECB President Trichet Speaks

Join us for the Morning FOREX Briefing daily at 7:45 AM Central/Chicago time (GMT -6)
Forexpros.com - Written by Jason Alan Jankovsky

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

� NY Fed index weaker, housing data flat
� Stops in range driving some trade
� Likely some profit taking seen by USD shorts

Overnight Preview

� Look for more two-way action
� USD to have a weaker tone next 24 hours

Looking Ahead to Tuesday
All times Eastern (-4 GMT)
� 8:30am USD Building Permits
� 8:30am USD PPI m/m
� 8:30am USD Core PPI m/m
� 8:30am USD Housing Starts

Summary
The USD ended the New York session lower but off early weakness as two-way technical trade dominated after US news this morning. A weaker NY Man. Index was offset by flat housing data today helping to keep a bid tone to equities lifting the major indices to key resistance during the day; USD traders sold the Greenback as risk-aversion mitigated a bit allowing the majors to hold moderate gains into the end of day. Traders note stops in-range in most pairs as profit-taking from recently set USD shorts lifted the USD off lows but sentiment remains corrective as the DX fell to critical support around the 86.50 area before bouncing; late longs likely on the bid as the DX reached near the 50 day MA in light trade. The result was a pullback in the major pairs but across the board the USD remained under pressure. GBP dropped off from overnight highs at 1.4232 to trade the 1.4080 area leaving a bit of a sell wick on the daily charts; cross-spreaders for GBP pairs were aggressively buying the other side helping the EURO as EURO-Sterling returned to hold the .9200 handle. EURO high prints at 1.3072 as model accounts were seen on the bid over 1.3000 area last night but the rate has dropped to the 1.2980 area into the close suggesting some profit-taking by the recent longs. Key support is seen near the 1.2880 area and traders noted stops under the 1.3030 area intraday adding to some of the volatility. Should the rate fall back a bit underlying tone is firm some desks report suggesting that a �buy the dip� mentality may be in play. USD/JPY found light stops in-range to the 95.66 high prints but the rate retreated under the 98.00 handle briefly as exporters remained on the offer despite bids from large names and general USD firmness in this pair. Ending the day around 98.20 area will likely encourage more bids overnight but traders warn that a drop in equities the next few days likely will pressure the USD/JPY near-term. If the exporters are still willing to sell strength the upside may be tough going in that pair. USD/CHF ends the day around 1.1850 area after an early dip to the 1.1800/10 area; low prints at 1.1804 still above technical support said to be around 1.1780 area. Stops are likely in size under the 1.1780 area as well and if the rate can�t hold the 1.1900 handle near-term a long-liquidating break is probably in the works. Traders note that bids were thinning out above the 1.1880 area overnight suggesting that buyers are likely expecting a pullback before making a try for a new long. USD/CAD regained the 1.2700 handle but only briefly; intraday high prints around the 1.2720 area were sold and the rate returned to the 1.2650 area quickly suggesting offers are waiting on strength to start the week. Ending near 1.2680 is around tech support but traders warn of stops under the 1.2620 area. In my view, the focus for USD strength appears to be shifting away from flight-to-quality buying the last few sessions. With firmer equities on the board and progress appearing to be made in resolving the economic issues some liquidation is likely being seen. Expect more two-way action the next 24 hours but with a bearish tone for the USD.

GBP/USD Daily

Resistance 3: 1.4350
Resistance 2: 1.4320
Resistance 1: 1.4250
Latest New York: 1.4053
Support 1: 1.3860
Support 2: 1.3780
Support 3: 1.3720

Comments

Rate holds gains and makes new high overnight; stops seen above weekly highs around the 1.4050 area. Tests support on pullback and holds for now. Lows likely remain secure. Reversal off weekly lows a positive technical but the volume needs to come up and I think the shorts have yet to bail as a group. Traders report stops in-range adding for two-way action. Long-term 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 with long-term support at 1.3500 area now in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short squeeze back on the board I think.
Data due Tuesday: All times EASTERN (-4 GMT)
5:30am GBP DCLG HPI y/y
4:10pm GBP BOE Gov King Speaks

EUR/USD Daily

Resistance 3: 1.3100
Resistance 2: 1.3080
Resistance 1: 1.3050
Latest New York: 1.2985
Support 1: 1.2850
Support 2: 1.2720
Support 3: 1.2680

Comments

Rate follows GBP in two-way action, holding support now above the 1.2880 area. Upside stops triggered on the move over 1.2950/60 area with new buying coming in above 1.3000 area. Overhead resistance is thick up to 1.3100 area so a pullback might be in the works. Aggressive traders can liquidate some longs above 1.3000 area and hold base positions. Traders note big names on the buy side on dips overnight; semi-officials buying 1.2900 area. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. Technical levels around the 1.2920/50 area now likely to offer support on further weakness so expect two-way action and consolidation underneath.
Data due Tuesday: All times EASTERN (-4 GMT)
6:00am EUR German ZEW Economic Sentiment
6:00am EUR ZEW Economic Sentiment
3:15pm EUR ECB President Trichet Speaks

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

[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]Today�s US Dollar Trading[/B]

� USD remains two-way after early strength
� Some pairs reverse to flirt with highs
� Large stops still out of range
[B]
Overnight Preview[/B]

� Look for USD to remain two-way
� Likely quiet ahead of CB rate announcements
[B]
Looking Ahead to Wednesday[/B]
All times Eastern (-4 GMT)
� 8:30am USD Core CPI m/m
� 8:30am USD CPI m/m
� 8:30am USD Current Account
� 10:30am USD Crude Oil Inventories
� 2:15pm USD FOMC Statement
� 2:15pm USD Federal Funds Rate
[B]
Summary[/B]
The USD continued to consolidate today reaching highs against the majors in early New York but failing to advance into key bullish levels. The majors recovered after the London fix rising off lows and in some pairs flirting with highs into the close. Today�s PPI and Housing Data was benign helping to underpin the possibility that inflation is not a problem and housing is beginning to recover but more data will be needed according to most analysts. Aggressive traders are suggesting that a positive response for Wall Street today signals that investor confidence is beginning to turn positive from neutral or negative. Should that be the case moving forward the �flight-to-quality� buying of USD will likely end and underlying fundamentals will probably begin to weaken the USD into the end of month at least. Traders are suggesting that the possibility of China reducing its holdings of US debt and curtailing their purchase of US debt moving forward works against the USD near-term; time will tell if a larger fall in the USD is likely but for now sentiment is turning neutral for the Greenback. GBP fell to a low print at 1.3963 missing large stops said to be resting under the 1.3940 area and the rate recovers t the 1.4050 area into the close. Lifting EURO with it, EURO has regained the 1.3000 handle and is pressuring highs at 1.3034 into the close with a positive tone noted by traders. Overnight action will likely see a test of the weekly highs at 1.3070 area and traders note stops from large shorts likely in the 1.3080 and above areas. A push to 1.3120 will likely result in short-covering adding to the underlying positive tone; traders note RHS interest in both EURO and GBP into the London fix. USD/CHF is flirting with lows on the day at 1.1811 and a late break would likely trigger close-in stops into the start of Asia tonight; traders note that volumes have remained subdued as large players have already likely sold into the rally this week and are sitting tight leaving only small time frame traders on the bid. USD/CAD has failed at the 1.2700 handle into the close after making highs at 1.2766 early; the rate is still within striking distance of the stops said to be resting in the 1.2660 area and 1.2620 area. The only rate to hold gains on the day of any size is USD/JPY trading to a high print at 98.98 before dropping back to the 98.40 area late in the day. Exporters remain on the offer above the 98.50 area and the failure to score the 99.0 handle today is likely a psychological negative to the bulls. Expect stops to be rolled-up closer to the 98.10 area overnight increasing the possibility of a stop-driven long-liquidation break. With the strong bullish sentiment combined with a failure at the recent highs a one-way liquidating break is increasingly likely. Look for the USD to continue in two-way trade with a weaker bias. Tomorrow�s data will likely be overshadowed by the FOMC announcement and the BOJ rate decision overnight.
[B]
GBP/USD Daily [/B]
Resistance 3: 1.4350
Resistance 2: 1.4320
Resistance 1: 1.4250
Latest New York: 1.4050
Support 1: 1.3860
Support 2: 1.3780
Support 3: 1.3720
[B]
Comments[/B]
Rate two-way, holds gains and has inside range day overnight; stops seen above weekly highs around the 1.4250 area. Tests support on pullback and holds for now. Lows likely remain secure. Reversal off weekly lows a positive technical but the volume needs to come up and I think the shorts have yet to bail as a group. Traders report stops in-range adding for two-way action. Long-term tech resistance now at 1.5000 area likely to cap near term but stops are building above 1.4400 and the 1.5000 handle is a big psychological number. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short squeeze back on the board I think. Next upside target is 1.4400 area
Data due Wednesday: All times EASTERN (-4 GMT)
5:30am GBP Claimant Count Change
5:30am GBP MPC Meeting Minutes
5:30am GBP Average Earnings Index 3m/y
5:30am GBP Unemployment Rate
[B]
EURO/USD Daily [/B]
Resistance 3: 1.3100
Resistance 2: 1.3080
Resistance 1: 1.3050
Latest New York: 1.3008
Support 1: 1.2850
Support 2: 1.2720
Support 3: 1.2680
[B]
Comments[/B]
Rate follows GBP in two-way action, holding support now above the 1.2950 area. Upside stops likely now in-range around 1.3040/50 area. Overhead resistance is thick up to 1.3100 area so a pullback might be in the works. Aggressive traders can liquidate some longs above 1.3000 area and hold base positions. Traders note big names on the buy side on dips overnight; semi-officials buying 1.2900 area. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. Technical levels around the 1.2920/50 area now likely to offer support on further weakness so expect two-way action and consolidation underneath.
Data due Wednesday: All times EASTERN (-4 GMT)
5:00am EUR Italian Industrial Production m/m

[ForexPros]

Today�s US Dollar Trading

� FOMC announces QE, agrees to buy US Debt
� Majors rally hard past most key resistance
� Volumes likely higher

Overnight Preview

� Look for follow-on selling of USD overnight
� Expect high volatility

Looking Ahead to Thursday
All times Eastern (-4 GMT)
� 8:30am USD Unemployment Claims
� 10:00am USD Philly Fed Manufacturing Index
� 10:00am USD CB Leading Index m/m
� 10:30am USD FOMC Member Tarullo Speaks
� 10:30am USD Natural Gas Storage

Summary
Is everybody happy? The US Fed today announced that they will be buying US Debt in huge amounts starting today and the result was a massive exodus out of the USD. Equities responded positively although more will need to be seen if investors view the progress as net-positive for equities near-term. The Greenback reversed mid-day gains as traders bailed on long USD positions and despite volatility it should be clear that the USD has more to go. Aggressive traders can hold open shorts in the USD through the end of the week as more longer-term traders have to bite the bullet and liquidate losing longs. GBP rallied through several layers of resistance after holding a dip into tech support mid-day at 1.3850 area; high prints are still coming but at this writing the printed high was 1.4266 with tech resistance due around 1.4320; although with the speed of the move likely those offers have been pulled. Same story in EURO I think, high prints at 1.3445 with more highs likely during overnight action. EURO is up in areas not seen since the last rally suggesting that offers likely have been pulled also. USD/CHF has failed from the highs as expected but low prints at 1.1381 likely will give way to more overnight. USD/JPY is lagging the break as bulls likely have stepped into the fray and bought the break. Low prints at 95.65 are currently holding but a close under the 96.00 handle would be a significant low as the rate has made new monthly lows on this move. Exporters will likely lean on any rally so aggressive traders can add into the close in my view. USD/CAD also on the defense with low prints under key support of 1.2520; low prints at 1.2470 with more coming overnight in my view. Aggressive traders can sell more on the close if we can close under 1.2520. In my view, the Fed decision to move to a QE stance has probably converted the market sentiment of �flight to quality� back to �USD trend lower�; it might take time for the market to fully appreciate the depth of the flood of USD coming but the underlying fundamentals support this I think. I would look for any appreciable rallies in USD the next few weeks to attract selling now and an overall downtrend to develop again. Look for further declines overnight but volatility will be high so pick your sell points in the USD carefully. Aggressive traders can add to all open USD shorts on the close today.

GBP/USD Daily

Resistance 3: 1.4420
Resistance 2: 1.4350
Resistance 1: 1.4320
Latest New York: 1.4235
Support 1: 1.3860
Support 2: 1.3780
Support 3: 1.3720

Comments
Rate drops into support around 1.3840/50 triggering close-in stops under 1.3940 area; rallies on Fed news but can�t significantly break 1.4250 yet. Likely that will come overnight. Dip is a head fake now that rate held 1.3980 into the close. Stops still seen above weekly highs around the 1.4250 area. Lows likely remain secure. The volume needs to come up and I think the shorts have yet to bail as a group; that may be starting in earnest now. Traders report stops in-range adding for two-way action. Long-term tech resistance now at 1.5000 area likely to cap near term but stops are building above 1.4400 and the 1.5000 handle is a big psychological number. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Next upside target is 1.4400 area, downside is near support at 1.3780
Data due Thursday: All times EASTERN (-4 GMT)
5:30am GBP Public Sector Net Borrowing
5:30am GBP Prelim M4 Money Supply m/m
7:00am GBP CBI Industrial Order Expectations

EURO/USD Daily

Resistance 3: 1.3650
Resistance 2: 1.3580
Resistance 1: 1.3500
Latest New York: 1.3451
Support 1: 1.2850
Support 2: 1.2720
Support 3: 1.2680

Comments
Rate follows GBP in two-way action but holds better on the dip, support now above the 1.2950 area. Upside stops likely cleared in size and if the rate can close above 1.3380 more upside is due. Overhead resistance above 1.3100 area negated so a pullback to there would also be a strong buy. Traders note big names on the buy side on dips overnight; semi-officials buying 1.2900 area the past few days. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. Technical levels around the 1.3150/80 area now likely to offer support on further weakness so expect two-way action. One way trade today suggests a lot of volume.
Data due Thursday: All times EASTERN (-4 GMT)
5:00am EUR Italian Trade Balance

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]

Overnight Asia/Europe

� USD mixed in two-way trade
� Traders note mostly technical action, some stops seen
� Majors retain a bid tone into New York

Today�s Economic Reports
All times EASTERN (-4 GMT)
� 10:00am USD Existing Home Sales
� 6:00pm USD Treasury Sec Geithner Speaks

Looking Ahead to Tuesday
All times Eastern (-4 GMT)
� 6:00am USD FOMC Member Evans Speaks
� 10:00am USD Fed Chairman Bernanke Testifies
� 10:00am USD HPI m/m
� 10:00am USD Richmond Manufacturing Index

Summary
The USD opens New York mixed this morning, higher against Yen and lower against other pairs. Overnight equities were firmer lending some support to EURO and stocks are called higher to open New York suggesting better tolerance for risk after a quiet weekend. Overnight comments from ECB president Trichet were seen as positive for the EURO also but traders note the action so far has been largely technical two-way trade. High prints at 1.3737 again drew sellers with lows at 1.3611 attracting buyers on the dips. Russian names seen on the offer traders say suggesting a possible re-balancing of the Ruble basket. GBP continues to trade higher with high prints at 1.4628 and holding the highs at the start of New York; low prints at 1.4460 also attracting buyers. USD/JPY continues to firm better than the other pairs suggesting that the bulls are still buying the correction. High prints at 96.80 likely to be attracting exporters in New York with the lows at 95.39 opening with a bid tone in Asia. If the push higher is still corrective then the 96.80 area is likely to draw sellers as the stop-driven break last week started in this area. USD/CHF low prints overnight at 1.1169 were again under the 200 day MA and attracting buyers but the rate remains under pressure in early New York; high prints at 1.1278 are continuing to attract sellers with stops likely around the 1.1320 area now building. Traders continue to remain wary of SNB intervention but so far no hints at all of support for the CHF. USD/CAD is lower after high prints at 1.2404 again failed to hold above the 1.2420 area; low prints at 1.2297 with the rate holding under 1.2320 in early New York. In my view, the USD is continuing to correct from the recent three-year highs and another leg lower is likely as the key technical support areas in most pairs are under threat again to start the week. If the majors can continue to advance in solid two-way action then it is a fair bet the USD buyers are thinking the dip is a buying opportunity and the bears are pressing their advantage. Short-term traders likely will be looking for a bounce in the Greenback and will likely have stops in-range making for potential whipsaw. Larger stops are likely building on both sides of the market as longer-term players continue to work the market from the short side in my view. Look for more two-way action today and tomorrow as the economic calendar is lighter until later in the week. The majors will likely cover the same ground twice but longer-term traders can hold longs if you have them; I don�t see the USD recovering easily before another leg lower near-term.

GBP/USD Daily

Resistance 3: 1.4730
Resistance 2: 1.4700/10
Resistance 1: 1.4650
Latest New York: 1.4620
Support 1: 1.3860
Support 2: 1.3780
Support 3: 1.3720

Comments

Rate firms again overnight; upside extends to new weekly highs. Overhead resistance now at 1.4650 with the 1.4700 handle likely to trade the next 24 hours. Traders report stops likely over the 1.4710/30 area. The door is open to a rally back to the 1.5000 area. Some in-range stops driving some trade over the 1.4500 area. Lows likely remain secure. The volume needs to come up and I think the shorts have yet to bail as a group; that may be starting in earnest now. Traders report stops in-range adding for two-way action. Long-term tech resistance now at 1.5000 area likely to cap near term. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Next upside target is 1.4800 area, downside is near support at 1.4250 area
Data due Tuesday: All times EASTERN (-4 GMT)
5:30am GBP CPI y/y
5:30am GBP BBA Mortgage Approvals
5:30am GBP Core CPI y/y
5:30am GBP RPI y/y
5:45am GBP Inflation Report Hearings
11:30am GBP BOE Gov King Speaks
2:30pm GBP MPC Member Blanchflower Speaks

EURO/USD Daily

Resistance 3: 1.3980
Resistance 2: 1.3820
Resistance 1: 1.3740
Latest New York: 1.3646
Support 1: 1.3400
Support 2: 1.3350
Support 3: 1.3300

Comments

Rate follows GBP in two-way action and holds gains but is not advancing as aggressively yet. Stops likely building above the 1.3740 area. Upside stops likely cleared in size and if the rate can close above 1.3650 area more upside is likely. Overhead resistance above 1.3350 area negated so a pullback to there would also be a strong buy. Traders note big names on the buy side on dips overnight; semi-officials and model accounts buying above 1.3400. Russians seen on the offer overnight in Europe. Bulls are likely in control of the market and any significant pullback is a buying opportunity in my view. Expect two-way action.
Data due Tuesday: All times EASTERN (-4 GMT)
4:30am EUR German Flash Manufacturing PMI
4:30am EUR German Flash Services PMI
5:00am EUR Current Account
5:00am EUR Flash Manufacturing PMI
5:00am EUR Flash Services PMI
10:00am EUR Belgium NBB Business Climate

Analysis by Forexpros - 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]

� Early USD strength fades after London fix
� Stops noted driving trade from smaller accounts
� Two-way action and technical trade dominate, more likely

[B]Overnight Preview[/B]

� Look for continued two-way action
� Majors likely to grind sideways-to-higher overnight
[B]
Looking Ahead to Tuesday [/B]
All times Eastern (-4 GMT)
� 6:00am USD FOMC Member Evans Speaks
� 10:00am USD Fed Chairman Bernanke Testifies
� 10:00am USD HPI m/m
� 10:00am USD Richmond Manufacturing Index

[B]Summary[/B]
After a brief foray into positive territory the USD is back under threat heading toward the low end of the recent ranges in late New York. Traders note that today�s action has been mostly stop driven by small accounts attempting to run with momentum but getting caught both ways. Aggressive buyers of USD from the overnight session were rewarded by new lows in the majors into the London fix but large accounts were using the dip to add to working longs and the majors reversed back toward the mid-to-high end of their ranges today; USD/CAD making lows in the process. Traders report some RHS interest into the fix for GBP and EURO helping to underpin across the board with only USD/JPY holding good gains but off the highs late. Traders also note that a US investment back a good seller of USD/JPY into the high prints around 97.36 and working the sell side through the close. USD/JPY ends around the 96.80 area after a brief dip to 96.50 area in stop driven trade obviously from longs set ahead of the fix. Traders expect the rate to remain two-way but the failure to hold the 97.00 handle will likely work against the bulls through tomorrow. GBP fell to tech support at 1.4449 low print only to recover quickly a full handle; the rate is firm into the 1.4550 area with the 100 day MA under threat on a closing basis near-term. Traders note that solid bids were seen on the break suggesting large names buying GBP. EURO fell to a low print at 1.3484 but spent no time on the 1.3400 handle recovering back to the 1.3630 area in late trade. Stops were noted on the break of 1.3510/20 area but volumes were light into the lows; traders note large names seen on the bid under 1.3500 suggesting the rate is due for further upside. Several shops note that the rate �feels� like it wants to try for the 1.3800 handle and with a strong close back on the 1.3600 handle the door is open for further short-squeeze. USD/CHF rallied along with USD strength elsewhere initially but failed at a high print of 1.1344 before dropping back a full handle; ending the day around 1.1240 area putting the 200 day MA back into focus. Traders warn a close below the 1.1195 area could put the recent rally on hold no matter what the SNB decides to do as a shift in sentiment is likely at that point and no central bank can fight sentiment. USD/CAD is making lows at this writing at 1.2265 putting the real potential for a close under the 100 day MA in play; traders note that the rate �feels� heavy after the fix and with interest in the emerging market currencies today money might move out of USD/CAD and into Aussie, Kiwi and others to take advantage of further strength seen there. In my view, the USD�s failure to extend early strength shows that the underlying strength of the Greenback in recent weeks is failing; aggressive traders can add to open USD shorts within 24 hours in my view. Look for the Majors to remain two-way but mostly higher overnight.

[B]GBP/USD Daily
[/B]
Resistance 3: 1.4730
Resistance 2: 1.4700/10
Resistance 1: 1.4650
Latest New York: 1.4574
Support 1: 1.3860
Support 2: 1.3780
Support 3: 1.3720
[B]
Comments[/B]
Rate firms again overnight; upside extends to new weekly highs before correcting back to zone of bids under 1.4480 area. Overhead resistance now at 1.4650 with the 1.4700 handle likely to trade the next 24 hours. Traders report stops likely over the 1.4710/30 area. The door is open to a rally back to the 1.5000 area. Some in-range stops driving some trade into the 1.4500 area. Lows likely remain secure. The volume needs to come up and I think the shorts have yet to bail as a group; that may be starting in earnest now. Traders report stops in-range adding for two-way action. Long-term tech resistance now at 1.5000 area likely to cap near term. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Next upside target is 1.4800 area, downside is near support at 1.4250 area
Data due Tuesday: All times EASTERN (-4 GMT)
5:30am GBP CPI y/y
5:30am GBP BBA Mortgage Approvals
5:30am GBP Core CPI y/y
5:30am GBP RPI y/y
5:45am GBP Inflation Report Hearings
11:30am GBP BOE Gov King Speaks
2:30pm GBP MPC Member Blanchflower Speaks
[B]
EUR/USD Daily[/B]

Resistance 3: 1.3980
Resistance 2: 1.3820
Resistance 1: 1.3740
Latest New York: 1.3645
Support 1: 1.3480
Support 2: 1.3350
Support 3: 1.3300

[B]Comments[/B]
Rate follows GBP in two-way action and holds gains but is not advancing as aggressively yet. Stops likely building above the 1.3740 area. Upside stops likely cleared in size and if the rate can close above 1.3650 area more upside is likely. Overhead resistance above 1.3350 area negated so a pullback to there would also be a strong buy. Traders note big names on the buy side on dips overnight; semi-officials and model accounts buying above 1.3400 and likely there today on the dip under 1.3500. Russians seen on the offer overnight in Europe. Bulls are likely in control of the market and any significant pullback is a buying opportunity in my view. Expect two-way action.
Data due Tuesday: All times EASTERN (-4 GMT)
4:30am EUR German Flash Manufacturing PMI
4:30am EUR German Flash Services PMI
5:00am EUR Current Account
5:00am EUR Flash Manufacturing PMI
5:00am EUR Flash Services PMI
10:00am EUR Belgium NBB Business Climate

Analysis by Forexpros - 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.

[ForexPros]

Today�s US Dollar Trading

� USD ends mixed after violent session
� Traders confused over Geither remarks
� GBP fails to follow EURO higher, USD/JPY near lows

Overnight Preview

� Look for the USD to remain under pressure
� Should get quiet ahead of GDP tomorrow

Looking Ahead to Thursday
All times Eastern (-4 GMT)
� 5:00am USD FOMC Member Lockhart Speaks
� 8:30am USD Unemployment Claims
� 8:30am USD Final GDP q/q
� 8:30am USD Final GDP Price Index q/q
� 9:25am USD FOMC Member Lacker Speaks
� 10:00am USD Treasury Sec Geithner Speaks
� 10:30am USD Natural Gas Storage
� 12:30pm USD FOMC Member Lacker Speaks

Summary
A violent day was had by all today as the USD whipsawed in big ranges before ending the day mixed. Comments by Treasury Secretary Geithner combined with better-than-expected US data combined to confuse traders in both directions but USD bears appear to prevail into the end of the New York session. Speaking on the possibility raised by the Chinese of a one-world economic currency were deflected by Geithner into a possibility of increasing SDR money through the IMF were misinterpreted on face-value throwing the USD into a big slide against the majors extending lows back under important intraday S/R; the Greenback recovering against some pairs but not others as the day wore on. GBP high prints at 1.4736 went unchallenged in New York although a big-figure rally tagged stops in the crosses; the GBP falling after the London fix to 1.4513 despite RHS interest at the fix. EURO rallied to a high print at 1.3651 before dropping back under the 1.3500 handle in less than 30 minutes only to regain the 1.3600 handle mid-day for a short time; the rate ends around 1.3570 area in thin trade after both sides got baked on the volatility. Traders note that despite the large swings in price the rate is firm into the close and expect another round of sellers to try for the 1.3300 handle and buyers to try for the 1.3700 handle overnight suggesting more high volatility is due. Aggressive traders can look to buy a dip in the rate back under the 1.3500 handle in my view. USD/JPY held firm all day near the 97.90 area occasionally poking its nose over 98.00 to look for stops or offers but fell back to lows late in the session ending around 97.10 area; the early dip to low prints at 96.91 did not find the rumored large stops resting under the market but no doubt there will be a probe for them overnight. USD/CHF low prints at 1.1168 were unchallenged during the day but the rate dropped to the 1.1170 area more than once before ending around the 1.1200 area; a secure close under the 200 day MA of 1.1209 will likely discourage the bulls near-term. Traders also note that the rate had the lowest close in two-months suggesting the SNB intervention has failed (as expected) and more losses to end the week are likely. Aggressive traders can add to open shorts in the rate on any strength in my view. USD/CAD is holding gains near daily highs of 1.2358 failing to extend losses on the whipsaw early in the day; low prints at 1.2218 were quickly bought but the rate still holds below the 100 day MA seen as eventually bearish for the pair. In my view, the resulting whipsaw on the Geithner comments clearly shows that traders are nervous and unclear in overall USD direction. I think traders need to accept that USD strength is probably going to be challenged to end the month and further losses are likely. Look for the Greenback to extend losses the next 24 hours or so; it should get quiet ahead of US GDP tomorrow with a negative number well factored in.

GBP/USD Daily

Resistance 3: 1.4880
Resistance 2: 1.4820/30
Resistance 1: 1.4780
Latest New York: 1.4540
Support 1: 1.4450
Support 2: 1.4280
Support 3: 1.4050

Comments
Rate two-way and violent, likely stops under 1.4600 area cleared with bids around 1.4550 taking the other side. Lows late in the day argue that the toolbox signal valid; aggressive traders could lighten up on longs near-term. Traders report large names on the dip and the rate is likely to follow EURO higher if EURO can rally. Overhead resistance now approaching the 1.5000 area with some tech resistance around 1.4880. Support likely on the dip to 14440/50 area. Traders report stops cleared over the 1.4710/30 area but expect another try from early shorts. The door is open to a rally back to the 1.5000 area. Some in-range stops driving some trade into the lows but traders feel the lows likely remain secure. The volume needs to come up and I think the shorts have yet to bail as a group; that may be starting in earnest now. Traders report stops in-range adding for two-way action. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Next upside target is 1.4800 area, downside is near support at 1.4450 area
Data due Thursday: All times EASTERN (-4 GMT)
26th-31st GBP Nationwide HPI m/m
5:30am GBP Retail Sales m/m
5:30am GBP Revised Business Investment q/q

EUR/USD Daily

Resistance 3: 1.3980
Resistance 2: 1.3820
Resistance 1: 1.3740
Latest New York: 1.3591
Support 1: 1.3420
Support 2: 1.3350
Support 3: 1.3300

Comments
Rate dips on news, clears stops under 1.3450/60 and sovereign bids seen into the lows. Rate makes highs in NY after the news suggesting the rate is attractive on dips and shorts are weak. Action remains two-way; is not advancing as aggressively yet. Stops likely building above the 1.3740 area. Upside stops in-range likely cleared in size above the 1.3620 area today but offers cap ahead of larger stops said to be over the weekly highs. If the rate can close above 1.3650/60 area more upside is likely. Overhead resistance above 1.3350 area negated so a pullback to there would also be a strong buy. Traders note big names on the buy side on dips overnight; Asian sovereigns seen buying around the 1.3480 area overnight. Bulls are likely in control of the market and any significant pullback is a buying opportunity in my view. Expect two-way action.
Data due Thursday: All times EASTERN (-4 GMT)
3:00am EUR GfK German Consumer Climate
5:00am EUR M3 Money Supply y/y
5:00am EUR Private Loans y/y

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.

[ForexPros]

Overnight Asia/Europe

� USD firms overnight, stops drive a lot of trade
� US rejects GM and Chrysler deal, equities fade
� Traders continue to trade fear ahead of G-20

Today�s Economic Reports
All times EASTERN (-5 GMT)
� NONE

Looking Ahead to Tuesday
All times Eastern (-5 GMT)
� 9:00am USD S&P/CS Composite-20 HPI y/y
� 9:45am USD Chicago PMI
� 10:00am USD CB Consumer Confidence

Summary
The USD firmed up overnight as follow-on selling found stops in the majors. Overnight news that Spain will offer its first bailout during the current financial crisis pushed EURO into stops under the 1.3200 area and below keeping the rate under pressure throughout the evening. Bids ahead of 1.3150 offered initial support but traders note more stops under the 1.3150 area are building. High prints in Asia at 1.3287 were offered by a US bank traders say. Adding weight are lower equities; markets reacting to news that the US government will not support the current plans by GM and Chrysler and may be looking for a bankruptcy. Traders note that investor confidence will likely take a hit on the news and expect further declines in equities during the day. GBP fell through stops layered under the 1.4200 handle with low prints at 1.4109; high prints at 1.4300 and the rate is holding 1.4150 area at the New York open. Traders note that UK mortgage approvals hit the highest levels since May of 2008 and are providing a bit of support from larger names. USD/JPY is lower as high prints at 98.33 went offer from exporters; low prints at 95.94 before finding bids. Traders note stops at 96.60/80 were in size suggesting the rate was heavily long from recent trade. USD/CHF continued to firm into the 100 day MA with high prints at 1.1517 just under the resistance level around 1.1520/30 area; low prints at 1.1439 in early Asia. USD/CAD rounds out the firmer USD this morning with high prints at 1.2539 and is holding firm around the 1.2490 area; low prints at 1.2382 above support around 1.2380 area. Attention now turns to the Thursday G-20 meeting this week and the ECB meeting. Traders are expecting a 25-50 BP cut from the ECB but do not expect any real help from the G-20; technical factors are likely to drive trade ahead of US data this week as well. Stops are noted below the current levels in the majors suggesting that the USD will remain bid into the end of the week. Aggressive traders can sell rallies in the USD but it is advisable to wait 24 hours to see how initial bulls react to the start of the week when the USD has firmed to start. In my view, the markets are still trading on news and potential flight-to-quality as the underlying fundamentals continue to favor a weaker USD. Regardless of how likely the Greenback is to weaken over time the market continues to price in fear enough that the USD is continuing to trade in a wide topping range. Look for the majors to remain under pressure today and into US data on Tuesday.

GBP/USD Daily

Resistance 3: 1.4440/50
Resistance 2: 1.4380
Resistance 1: 1.4300
Latest New York: 1.4204
Support 1: 1.4100/10
Support 2: 1.4050
Support 3: 1.4020

Comments

Rate falls through stops into support around the 1.4100 handle overnight; traders report more stops waiting under 1.1400 with bids around 1.4050 for the day. Bulls need to be on the sidelines at this point. A close back under the 1.4250 area argues for more losses. Traders report large names on the dips last week but they may have been whipsawed out to start this week. Overhead resistance now drops to 1.4380 to 1.4440 area; overhead target of the 1.5000 area likely to be on hold with a test of the lows first possibly creating a range. Traders feel the 23-year lows will likely remain secure. The shorts have taken control of the market above the 1.4440 area for now and if a range is forming a test under the 1.3900 handle is likely; traders report stops in-range adding for two-way action.
Data due Tuesday: All times EASTERN (-5 GMT)
4:30am GBP Index of Services 3m/3m
9:00am GBP MPC Member Tucker Speaks

EUR/USD Daily

Resistance 3: 1.3380
Resistance 2: 1.3330
Resistance 1: 1.3280
Latest New York: 1.3207
Support 1: 1.3150
Support 2: 1.3100
Support 3: 1.3080

Comments

Rate fails at support and clears large stops under 1.3200; rate likely has stops building in both directions but shorts have taken control of the market as the rate gives back gains over the 1.3400 area last week late. Action remains two-way; stops under 1.3150 area said to be building in size suggesting the rate has another leg lower coming near-term. That dip would be a buy opportunity in my view. Overhead resistance of 1.3350 area now back in play; expect sellers in that area on a rally. Asian sovereigns seen selling rallies last week and a US bank seen leaning on the rate at the open; no doubt momentum traders from Friday�s close. Long-term bulls are likely still in control of the market and this significant pullback is a buying opportunity in my view but the timing needs another day or two to work through. Expect two-way action.
Data due Tuesday: All times EASTERN (-5 GMT)
3:55am EUR German Unemployment Change
4:00am EUR Italian Retail Sales m/m
5:00am EUR CPI Flash Estimate y/y
5:00am EUR Italian Prelim CPI m/m

Join us for the Morning FOREX Briefing daily at 7:45 AM 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.

[ForexPros]

Today�s US Dollar Trading

� USD holds gains after a stop-driven rally to highs
� Majors hold key support on the dip, large names buying
� Technical traders likely in control ahead of US data

Overnight Preview

� Look for the USD to remain two-way but off the highs ahead of US data

Looking Ahead to Tuesday
All times Eastern (-5 GMT)
� 9:00am USD S&P/CS Composite-20 HPI y/y
� 9:45am USD Chicago PMI
� 10:00am USD CB Consumer Confidence

Summary
The USD is holding gains in late New York as traders continue to digest weekend developments; focus is on the upcoming G-20 meeting which is expected to produce solid plans for addressing the developing global economic crisis but smart money is not anticipating anything concrete at this point. More interest is on how the ECB may move interest rates with a strong expectations of at least a 25 BP rate cut heavily factored in. In my view, any hint that the ECB will stand pat or make less than a 25 BP cut will likely fuel a short-covering rally although a case can be made for a �buy the rumor/sell the fact� rally anyway. EURO is holding the 1.3150 area in light trade after a dip into stops around the 1.3150 resulted in a low print at 1.3113 before recovering quickly. Traders note that stops were in good size suggesting that longs were early on the dip Friday and semi-official names were seen on the bid under the 1.3150 area. Also, some profit-taking bids from momentum and short-term shorts were noted suggesting that the selling pressure was not going to last. EURO is also holding the 100 day MA on the dip making for a technical buy; a close above the 1.3200 handle near-term would but the bears on the defense I think. GBP fell into low prints overnight at 1.4109 and failed to follow EURO lower today suggesting that the dip was supported by quality bids. The rate has retraced about 61.8% of the monthly range and will likely end the month in a �doji� formation suggesting the GBP is at a point of indecision; aggressive traders can buy any further weakness into the low 1.4100 area or slightly below with key support about the 1.4050/80 area. USD/JPY continued to bounce off support around the 96.00 handle failing to extend the day�s range from overnight lows at 95.94; the rate regains the 97.00 handle into the close leaving a healthy bid-wick suggesting another whipsaw back to the breakdown area around the 98.30 area. Overhead resistance is expected to be heavy on any test of the 98.50/80 area and aggressive traders can look to short the rate on a rally back to that area. USD/CHF is holding sharp gains against a backdrop of SNB intervention; high prints in New York extended the days ranges to 1.1552 before falling back under the 1.1500 handle. Sellers are likely on any strength and traders can look to sell into the 1.1580 area if we get it on further volatility. USD/CAD continued to advance as well finding upside stops over the 1.2580 area for a high print at 1.2650 and is holding gains into late New York trade; traders note that resistance is next at 1.2680 area and likely will attract selling from short-term longs but the rate is above the 50 day MA once again possibly encouraging buyers on a firm close. Fib resistance is around 1.2630 and likely some consolidation will be the result the next 24 hours or so. In my view, the USD rally was largely due to weak equities as the entire day centered around the possible bankruptcy of GM and/or Chrysler; traders note that without the news it is hard to argue for a flight-to-quality rally in the greenback and the higher pricing may be a head-fake. Look for two-way action overnight with a pullback in the USD ahead of tomorrow�s US data.

GBP/USD Daily

Resistance 3: 1.4440/50
Resistance 2: 1.4380
Resistance 1: 1.4300
Latest New York: 1.4248
Support 1: 1.4100/10
Support 2: 1.4050
Support 3: 1.4020

Comments
Rate falls through stops into support around the 1.4100 handle overnight; traders report more stops waiting under 1.4100 with bids around 1.4050 for the day. Rate recovers back to the 1.4200 handle late as late shorts fail to get a foothold. A close back under the 1.4250 area argues for more losses but support is solid around 1.4100 so aggressive traders can buy dips. Traders report large names on the dips last week but they may have been whipsawed out to start this week. Overhead resistance now drops to 1.4380 to 1.4440 area; overhead target of the 1.5000 area likely to be on hold with a test of the lows first possibly creating a range. Traders feel the 23-year lows will likely remain secure. The shorts have taken control of the market above the 1.4440 area for now and if a range is forming a test under the 1.3900 handle is likely; traders report stops in-range adding for two-way action.
Data due Tuesday: All times EASTERN (-5 GMT)
4:30am GBP Index of Services 3m/3m
9:00am GBP MPC Member Tucker Speaks

EUR/USD Daily

Resistance 3: 1.3380
Resistance 2: 1.3330
Resistance 1: 1.3280
Latest New York: 1.3187
Support 1: 1.3150
Support 2: 1.3100
Support 3: 1.3080

Comments
Rate fails at support and clears large stops under 1.3200; rate likely has stops building in both directions but shorts have taken control of the market as the rate gives back gains over the 1.3400 area last week late. Action remains two-way; stops under 1.3150 area said to be building in size but the rate recovers from low prints off the 100 day MA suggesting the move lower is likely supported on dips. Overhead resistance of 1.3350 area now back in play; expect sellers in that area on a rally. Asian sovereigns seen selling rallies last week and a US bank seen leaning on the rate at the open; no doubt momentum traders from Friday�s close. Long-term bulls are likely still in control of the market and this significant pullback is a buying opportunity in my view but the timing needs another day or two to work through. Expect two-way action.
Data due Tuesday: All times EASTERN (-5 GMT)
3:55am EUR German Unemployment Change
4:00am EUR Italian Retail Sales m/m
5:00am EUR CPI Flash Estimate y/y
5:00am EUR Italian 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.

[ForexPros]

Today�s US Dollar Trading

� USD ends mixed, S/R holds in two-way action
� Stops noted in both directions intraday
� Traders on G-20 watch ahead of ECB Thursday

Overnight Preview

� Look for more two-way action overnight
� USD likely to remain range bound

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
� 10:00am USD ISM Manufacturing PMI
� 10:00am USD Pending Home Sales m/m
� 10:00am USD Construction Spending m/m
� 10:00am USD ISM Manufacturing Prices
� 10:30am USD Crude Oil Inventories
� All Day USD Total Vehicle Sales

Summary
The USD ends the day mixed after another two-way session dominated by end-of-quarter capital flows. Traders note that GBP and EURO rallied to their highs on anticipation of fixing demand but then fell off a full handle after the fix only to return to the highs by the end of the day. GBP high prints at 1.4361 before retracing near the low 1.4200 area before returning to the 1.4350 area into the close. Traders note that cross-spreaders on the GBP side of the crosses were selling into the fix but covered into the end of day adding to the upside pressure. EURO high print at 1.3343 ahead of offers said to be resting around 1.3350 before falling back to the 1.3220 area; steady bids and short-covering lifted the rate to 1.3290 area near the close suggesting that the rate is attracting quality names on the dips. Sentiment in the pair remains corrective more so than bearish traders say arguing for further gains in the days ahead. Focus on the G-20 meeting this week is expected to add a bit of uncertainty to both EURO and GBP with rhetoric expected to be USD-supportive but traders are taking a wait and see approach due to the track-record of large government meetings. Traders note that the ECB rate announcement due Thursday morning is also in focus with a 25 BP cut in rates likely fully factored in. Traders continue to see the ECB as �behind the curve� in addressing the global financial crisis but the European model is probably able to move faster in resolving the crisis for their participation suggesting that the ECB will likely remain more cautious rather than have to drop rates too fast only to raise them quickly. USD/JPY rallied through resistance at 98.80 area for a stop-driven lift to the 200 day MA; high prints at 99.38 were offered by exporters with more layered ahead of 99.50 traders say. Upside may be limited and a close back above the 98.00 handle likely will encourage late longs suggesting that a retracement is likely to end the week. USD/CHF failed to follow USD strength early and held below the 1.1400 handle into the close; high prints at 1.1518 went unchallenged in New York and the rate ends around 1.1380 area in thin conditions. USD/CAD rallied for a high print at 1.2655 before dropping back under the 1.2600 handle to end around 1.2590 area; traders note that stops above the market likely have been cleared leaving the rate vulnerable to a sell-off. In my view, the Greenback is continuing to trade within existing ranges despite extending some weekly ranges today; no real technical levels were breached and in fact the USD held below important tech levels violated on the break lower earlier in the month suggesting that this rally was mostly corrective and the majors are likely to hang onto gains by the end of the week. Look for the USD to remain two-way tonight with the USD weaker into the start of G-20 late Wednesday. Should the rhetoric be highly supportive of the USD look for the Majors to retreat but hold support across the board.

GBP/USD Daily

Resistance 3: 1.4440/50
Resistance 2: 1.4380
Resistance 1: 1.4350
Latest New York: 1.4348
Support 1: 1.4100/10
Support 2: 1.4050
Support 3: 1.4020

Comments

Rate rebounds after holding support on correction back to the 1.4100 area yesterday, stops seen in the rate over 1.4250 and 1.4300 with more likely layered above 1.4350/80 area. Rate ends near highs erasing toolbox signal; support is likely solid. Traders report more stops waiting under 1.4100 with bids around 1.4050 for the day but volatility not expected to be that high as the rate has a rather tight range so far and may be grinding higher. A close back under the 1.4250 area argues for more losses but support is solid around 1.4100 so aggressive traders can buy dips. Traders report large names on the dips last week but they may have been whipsawed out to start this week. Overhead resistance now drops to 1.4380 to 1.4440 area; overhead target of the 1.5000 area likely to be on hold with a test of the lows first possibly creating a range. Traders feel the 23-year lows will likely remain secure. The shorts have taken control of the market above the 1.4440 area for now and if a range is forming a test under the 1.3900 handle is likely; traders report stops in-range adding for two-way action.
Data due Wednesday: All times EASTERN (-5 GMT)
1st-9th GBP Halifax HPI m/m
4:30am GBP Manufacturing PMI
4:30am GBP Housing Equity Withdrawal q/q

EUR/USD Daily

Resistance 3: 1.3400/10
Resistance 2: 1.3380
Resistance 1: 1.3330
Latest New York: 1.3285
Support 1: 1.3150
Support 2: 1.3100
Support 3: 1.3080

Comments

Rate recovers to reject the 100 day MA, stops from late shorts seen in the 1.3250 area and above. Traders note strong offers above the 1.3330 area but bids are absorbing those for now with a solid foothold over the 1.3300 handle to start New York. Rate has two-way action and returns to the highs to end suggesting a try for stops above. Rate likely has stops building in both directions but shorts have taken minor control of the market as the rate gives back gains over the 1.3400 area last week late. Action remains two-way; any move lower is likely supported on dips. Overhead resistance of 1.3350 area now back in play; expect sellers in that area on a rally. Possibly more official and semi-official bids overnight and today. Long-term bulls are likely still in control of the market and this significant pullback is a buying opportunity in my view.
Data due Wednesday: All times EASTERN (-5 GMT)
2:00am EUR German Retail Sales m/m
4:00am EUR Final Manufacturing PMI
5:00am EUR Unemployment Rate

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 extends ranges in some pairs, volumes light after fix
� Majors hold important S/R
� Stops likely waiting on either side of the market
[B]
Overnight Preview[/B]

� Look for more two-way action
� Should get quiet ahead of news tomorrow
[B]
Looking Ahead to Thursday[/B]
All times Eastern (-5 GMT)
� 8:30am USD Unemployment Claims
� 10:00am USD Factory Orders m/m
� 10:30am USD Natural Gas Storage
� All Day ALL G20 Meetings

[B]Summary[/B]
The USD ends mixed today after another volatile two-way session; some pairs extending their ranges during New York trade. Most action was ahead of the London fix as US fundamentals were released as well as overseas news reports from pre-G-20 meeting participants; traders note that volumes dropped significantly after the London fix exaggerating price moves into the end-of-day. GBP rallied to a new daily high ahead of expected resistance around the 1.4450 area; high prints in late New York at 1.4440 with traders ready for more upside overnight as stops above the 1.4450 area are said to be in size. Cross-spreaders for GBP also active some desks report but most of the action was overnight for Yen. EURO fell back from post-London fix action to head for the lows making a show under the 1.3200 handle briefly before recovering back to the 1.3250 area; high prints in New York at 1.3287 were not enough to trigger stops said to be resting above the market. Traders note that the 1.3300 area is likely key resistance ahead of the ECB meeting tomorrow with a quiet overnight session likely as traders wait for news. USD/JPY remained two-way first dropping to the low 98.00 handle but failing to extend lows; then rallying back above the 99.00 handle before dropping back. Price action likely suggests intraday traders with smaller capital day-trading the range. Closing below the 99.00 area and making for a �doji� day, traders expect any upside follow-on buying to be limited with overhead resistance said to be formidable above the 98.50 area. Aggressive traders can sell 99.00 area if there is any two-way action overnight. USD/CHF managed to rally to a high print back at the 100 day MA of 1.1510 before dropping back to end the day around the 1.1450/60 area. Low prints at 1.1370 were on low volume with stops said to be resting under the 1.1350 area. USD/CAD also extended the day�s range for a high print in pre-London fix action to 1.2719 before dropping back more than a full handle to the 1.2600/10 area; low prints at 1.2573 are still above the stops said to be resting in the 1.2550 area. Traders note that across all pairs action was order-driven and thin suggesting that both sides are either flat or happy with their positions ahead of the G-20 communiqu� and the ECB rate announcement due in the morning. In my view, the USD is continuing to cover the same ground twice as expected; likely there are stops building on both sides of the market and tomorrow will see more two-way action. If the Greenback can�t hold recent gains the possibility of a further long-liquidation break by the end of the week is a real probability. Aggressive traders can add to open shorts in the USD on any strength overnight as current ranges are likely to hold. Look for more consolidation by the USD into news tomorrow. Be patient and let open shorts work through the ECB data in the morning as the expected rate cut from the ECB is likely well-factored in.
[B]
GBP/USD Daily [/B]

Resistance 3: 1.4500
Resistance 2: 1.4440/50
Resistance 1: 1.4420
Latest New York: 1.4450
Support 1: 1.4180
Support 2: 1.4050
Support 3: 1.4020

[B]Comments[/B]

Rate makes new highs late in the session; holds gains after two-way action overnight. Positive UK manufacturing data helps hold tone. Traders note stops above the 1.4450 area as expected with offers ahead. Stops cleared over 1.4250 and 1.4300 with more cleared above 1.4350/80 area. A close back under the 1.4250 area argues for more losses but support is solid around 1.4100 so aggressive traders can buy dips. Close over 1.4450 argues for further gains. Overhead resistance now drops to 1.4380 to 1.4440 area; overhead target of the 1.5000 area likely to be on hold with a test of the lows first possibly creating a range. Traders feel the 23-year lows will likely remain secure. The shorts have taken control of the market above the 1.4440 area for now and if a range is forming a test under the 1.3900 handle is likely; traders report stops in-range adding for two-way action.
Data due Thursday: All times EASTERN (-5 GMT)
2:00am GBP Nationwide HPI m/m
2nd-9th , GBP Halifax HPI m/m
4:30am GBP BOE Credit Conditions Survey
4:30am GBP Construction PMI
[B]
EUR/USD Daily[/B]

Resistance 3: 1.3400/10
Resistance 2: 1.3380
Resistance 1: 1.3330
Latest New York: 1.3240
Support 1: 1.3150
Support 2: 1.3100
Support 3: 1.3080

[B]Comments[/B]

Rate holds point of indecision so far today; late break fails to attract more bids but still solid above the 100 day MA. Traders note strong offers above the 1.3330 area but bids are absorbing those for now with a foothold over the 1.3300 handle to signal a short-squeeze. Rate has two-way action suggesting a try for stops above. Rate likely has stops building in both directions but shorts have taken minor control of the market as the rate gives back gains over the 1.3400 area last week late. Action remains two-way; any move lower is likely supported on dips. Overhead resistance of 1.3330/50 area now back in play; expect sellers in that area on a rally. Possibly more official and semi-official bids overnight with traders noting Middle-eastern names on the bid. Long-term bulls are likely still in control of the market and this significant pullback is a buying opportunity in my view.
Data due Thursday: All times EASTERN (-5 GMT)
7:45am EUR Minimum Bid Rate
8:30am EUR ECB Press Conference
10:00am EUR ECB President Trichet Speaks

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
[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]Today�s US Dollar Trading[/B]

� USD reverses off lows to make highs in New York
� Majors respect existing S/R, stops in range drive most action
� Volumes lighter with most action ahead of the London fix
[B]
Overnight Preview[/B]

� Look for the Greenback to hold existing ranges
� Volumes likely to be light
[B]
Looking Ahead to Tuesday[/B]
All times Eastern (-5 GMT)
� 10:00am USD IBD/TIPP Economic Optimism
� 3:00pm USD Consumer Credit m/m

[B]Summary[/B]
The USD continued to correct higher trough today�s New York trade reaching the best levels of the day against the majors shortly after the London fix; despite the rise in the Greenback the majors held important S/R levels during the day and remains in two-way action into the close. Technical trade was the rule for the most part as the lack of economic news kept traders focused on near-time price levels with stops helping to drive most of the intraday action. GBP never traded back to the earlier high seen in late Europe this morning of 1.4961 but retreated finding layers of stops for a low print at 1.4668 before recovering more than a full handle and settling above the 1.4700 handle. Traders note that cross-spreaders for Yen liquidating Yen crosses as well as weakness in EURO helping to drive the rate lower but Cable still held technical support at the 1.4720 area. EURO also took a dive dropping from the 1.3550 area in early trade for a low print at 1.3356 once again holding tech support ahead of the 1.3330 area; the rate also seeing liquidation from Yen crosses. EUURO recovered back to the 1.3400 area and is trying for a close above the 1.3400 handle suggesting that the dips are being bought. Traders note that volumes were light on the move lower and there was bid interest during the fix today. The rest of the majors all held under tech resistance after trying for highs; traders note that the tech levels seen from last week are back in play across all pairs. USD/CHF high prints at 1.1409 were under the tech level of 1.1420; the rate failing to hold the 1.1400 handle by the end of the day. USD/JPY held firm making the USD at the highest levels seen since last year but off its highs; high prints at 101.46 never challenged in New York and the rate is unable to hold the 101.00 handle into the close. USD/CAD rallied to a high print at 1.2443 before dropping back under the 1.2400 handle; a late push back to the 1.2400 handle sees the rate holding around the 1.2405 area in light trade. All the rates either held their respective 100 day MA S/R levels or their recent Fib levels suggesting that all of today�s action was dominated by short-term traders and likely will repeat tomorrow. With a light economic calendar due tomorrow and into mid-week the USD will likely remain two-way for the next 24-48 hours. Look for the Greenback to be subdued overnight and respect current ranges.

[B]GBP/USD Daily [/B]

Resistance 3: 1.5040/50
Resistance 2: 1.5000
Resistance 1: 1.4950
Latest New York: 1.4726
Support 1: 1.4650
Support 2: 1.4580
Support 3: 1.4550

[B]Comments[/B]
Rate pressures up to within striking distance of 1.5000 overnight; likely offers will be thick on any further advance. Aggressive traders can look to lighten up on longs above 1.4950 area. Stops noted above the 1.4880 area on the way up with traders noting stops under there on the way down. Rate makes lows after the fix but holds support to bounce back onto the 1.4700 handle. Traders note support is likely firm at the 1.4450 area as expected; offers ahead of 1.4700 easily absorbed keeping the bias to the upside. Close over 1.4900 argues for further gains but tech resistance is firm ahead of 1.5000. Overhead target of the 1.5000 area likely to trade but expect pressure. Traders feel the 23-year lows will likely remain secure. The shorts may have lost control of the market above the 1.4440 area now and if that is the case a test of the 1.5000 area is almost a done-deal. Traders report stops in-range adding for two-way action.
Data due Tuesday: All times EASTERN (-5 GMT)
4:30am GBP Manufacturing Production m/m
4:30am GBP Industrial Production m/m
7:01pm GBP Nationwide Consumer Confidence
7:01pm GBP NIESR GDP Estimate

[B]EUR/USD Daily [/B]

Resistance 3: 1.3620/30
Resistance 2: 1.3580
Resistance 1: 1.3520
Latest New York: 1.3397
Support 1: 1.3380
Support 2: 1.3350
Support 3: 1.3330
[B]
Comments[/B]
Rate consolidates but is capped at 1.3580 with stops likely above 1.3600 now. Rate is solid above the 100 day MA. Foothold over the 1.3500 handle fails today but support is solid ahead of 1.3330 area. Rate likely has stops building in both directions; shorts lose control of the market after rate clears stops above the 1.3430 area. Action remains two-way; any move lower is likely supported on dips. Overhead resistance at 1.3330/50 area now support on a pullback; aggressive traders can ADD on a dip. Possibly more official and semi-official bids overnight with traders noting Middle-eastern names on the bid. Long-term bulls are likely still in control of the market and this significant pullback is a buying opportunity in my view.
Data due Tuesday: All times EASTERN (-5 GMT)
NONE

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

[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.