Published: September 24, 2007 11:11 PM
[B]Early in today�s Asia session we saw USD buyers resurface[/B], as the greenback enjoyed a relief rally after a weeklong selloff. Technical levels were once again tested with some holding and others falling by the wayside. However Forex traders soon became indecisive about the value of the USD as gains evaporated as trading went on. After spending the first half of the session mounting a comeback, the dollar lost its momentum as speculators began buying the other majors on dips.
[B]EURUSD began the session continuing its New York grind lower.[/B] By mid Tokyo morning the pair had breached its medium term support level of 1.4070 and it seemed that momentum would take it even lower. However the current mindset of the currency trader soon became clearer as USD sellers entered. [B]EURUSD shot 20+ pips within a few minutes, back to the 1.4080s. GBPUSD saw similar volatility, after diving lower by 60+ pips to the 2.0130s area, the pair bounced as if it had landed on spring, recovering 40+ pips[/B]. For the first Asia session in several days, USDCAD managed to deal firmly above 1.0000, although it seemed to be caught in a tug of war at times. The pair ripped higher by 30+ pips out the gate into the 1.0050s area. However offers were waiting, as they quickly sold into the USD strength.
On the economic front, currency traders only had the Bank of Japan�s minutes for last week�s meeting. The central bank attributed the lack of movement in their benchmark rate to the current turmoil in the financial markets. USDJPY was little changed following the release and continued its struggle with extraordinary resistance at the 115.00 level. The pair traded range bound between this resistance level and 114.60 support, while the high yielding JPY crosses saw similar whippy action.
Ahead in tonight�s upcoming London session, investors will be looking for extensions of recent trends. Ongoing dollar weakness has consistently stifled any attempts at a rally of the past several days. Also, fundamental traders will be keeping their eyes on economic data expected from the U.K. (Total Business Investment) and Germany (IFO). [B]Yesterday�s London start saw technical levels taken out within minutes. Will we see this again in GBPUSD and EURUSD? Or will dollar buyers finally overcome greenback bears? We�ll have to wait and see![/B]
[U]Upcoming Data Releases (London Session):
UK: 4:30am ET Total Business Investment (Est.: .8% / Prior: .8%) Relevance � Low
GE: 4:00amET IFO Current Assessment (Est.: 111 / Prior: 111.5) Relevance � Medium[/U]