Forexpros.com Daily Analysis and Personal Thoughts

[ForexAnalysis]

Read the Daily Forex Trading Analysis

Overnight Asia/Europe
• USD firms a bit
• Technical trade and stops drive GBP and EURO
• Volumes moderate

Today’s Economic Reports
All times EASTERN (-5 GMT)
• None for the day
Expect technical trade for the most part

Looking Ahead
All times EASTERN (-5 GMT)
• 9:00am USD National HPI Composite-20
• 10:00am USD Consumer Confidence
• 10:00am USD House Price Index m/m
• 10:00am USD Richmond Fed Index

Summary
The USD is two-way overnight but starts the New York session on the offensive. Still range-bound against Swissy and Yen, the Greenback has recovered some of the losses from late last week. After starting firm in Asia and weakening on exporter supply, the USD/JPY has advanced back to the 107.80 level for a high print in New York at 108.89 but traders see a lot of offers layered up to the technical resistance area of 108.00/10. Stops are said to be over that figure but the overall sentiment is for lower USD/JPY for the week. Swissy is back in the sell zone around the 1.0440/50 area; aggressive traders can look to sell the pair anywhere over the 1.0440 area in my view. The rate is technically weak trading higher on lighter volume and stops above the 1.0410 area so a pullback and long selling wick would be ideal today in that pair. Cable has dropped dramatically tracking EURO lower as both rates suffer from cross-spreading and poor German IFO data. Cable fell from the high print at 1.9760 overnight for a low print in early New York at 1.9699 and remains under pressure. Forex traders note that the lower-than-expected German IFO data disappointed EURO dropping the rate back into close-in stops at the 1.5550 area for a low print in late Europe at 1.5498 where Asian sovereign demand was seen. Aggressive traders can look to buy EURO under the 1.5520/30 area today and expect a buy signal during New York action today. Across the board traders note that volumes are modest and action is technical. All the pairs are trading inside established ranges from last week so nothing really significant is happening just yet. In my view, you can expect a further decline in GBP today and through the week while the USD/JPY and USD/CHF will likely remain range-bound and under pressure. Expect a slow-grind in those pairs. EURO is likely to firm up and advance this week as the technical’s look positive and the market needs to price in a 25 BP rate hike coming in two weeks from the ECB. Look for the USD to remain two-way but weaker today.


GBP/USD Daily

Resistance 3: 1.9750/60
Resistance 2: 1.9720
Resistance 1: 1.9680
Latest New York: 1.9612
Support 1: 1.9580
Support 2: 1.9550
Support 3: 1.9520

Comments
Toolbox provides another strong sell signal overnight, target is short is around the 1.9480/19500 area through the week. Surging oil prices helped EURO last week but a softer start is likely spilling over into GBP. Spillover weakness from EURO still likely all week. Continue to expect a lot of cross-trading. Aggressive traders can add to their open shorts anywhere under the 1.9650 area I think; if not short sell a rally into the 1.9650/80 area if you get it today.

Data due Tuesday: All times EASTERN (-5 GMT)

4:30am GBP BBA Mortgage Approvals

EUR/USD

Resistance 3: 1.5680
Resistance 2: 1.5650/60
Resistance 1: 1.5620/30
Latest New York: 1.5523
Support 1: 1.5550
Support 2: 1.5500
Support 3: 1.5470

Comments
Rate drops back under the 1.5550 area to start the week; should get a buy signal the next day or so. The 50 bar MA offering resistance; close over the 50 bar likely to draw more buying early in the week but for now there is pressure coming on in that area. Close Friday above the 1.5550 area failed to attract more buying, drop into close in stops near the 1.5550 area from late longs; a dip is likely a buying opportunity. Bids will likely be in the 1.5500/20 area or so. Expect higher action next week as late shorts get squeezed. If long, OK to hold over the weekend. Buy the next dip to add to positions.

Data due Tuesday: All times EASTERN (-5 GMT)

Tentative EUR German Import Price Index
2:45am EUR French Consumer Spending


Analysis Provided by: Forexpros.com written by Jason Alan Jankovsky.

Also Check our Forex brokers section.

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.

[ForexAnalysis]

Daily Forex Trading Analysis

Today’s US Dollar Trading
• USD holds gains but flows light
• S/R holds as expected
• Speculation that the Fed will not move rates capping the USD

Overnight Preview
• Consolidation likely
• Two-way action with a downside bias

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 9:00am USD National HPI Composite-20
• 10:00am USD Consumer Confidence
• 10:00am USD House Price Index m/m
• 10:00am USD Richmond Fed Index

Summary
The USD is firmer but falling off the highs for the day as the volumes are drying up into the New York close. Traders note that across the board the USD remained inside established ranges to start the week and due to the two-way nature of today’s action most traders expect more consolidation. Volumes got really light after the London fix most desks say and it is likely that traders don’t want to force positions ahead of the two-day FOMC meeting which starts tomorrow. Analysts are almost unanimous that the Fed will not move rates on Wednesday but are divided as to the significance of the statement. Most are expecting Bernanke to “talk tough” but no one expects the Fed to do anything for the next two or three FOMC meetings. In response to poor European news overnight the EURO and GBP both fell back to near-term support but rallied off those lows after the London fix this morning and are now at their highs for the New York session into the close. EURO has regained the 1.5520 area after dropping into the 1.5460/70 area on light volume this morning. Forex traders expect EURO to remain two-way through the week with technical trading likely; most analysts say the rate is “fairly” pricing in a 25 BP hike by the ECB on Jul 3rd. In my view, the FOMC is the key to the trade this week as no move at all will work favorably for the EURO. USD/JPY continued to hold gains but was unable to attract any serious buying at the high prints of 108.07; stops rumored to be above the 108.10 area are out of range today. Traders expect the rate to weaken near-term as the technical picture favors at least a test of the 107.00 handle this week. In my view, the rate is due for a sharp sell-off as all these longs must be getting nervous now that the rate has failed at the quarterly highs several times. Look for the USD/JPY to rotate lower overnight and test the south end of the range the next 24 hours. Swissy is also failing at key resistance, the 1.0480 area. Offers from late longs appear to be active as no stops were reported above the 1.0410/20 area only active buying. Now that those longs are under threat expect a pullback into the 1.03 handle soon. Should be a quiet night ahead of US data tomorrow; don’t expect any surprises.


USD/JPY Daily

Resistance 3: 108.80
Resistance 2: 108.50
Resistance 1: 108.00/10
Latest New York: 107.81
Support 1: 107.20/30
Support 2: 107.00
Support 3: 106.80

Comments
Rate grinding sideways to higher overnight; volumes lighter and upside resistance is firm at 108.00 area. Failure to close above the 108.00 handle Monday a good sign rate is ready to break back to the lows looking for stops under the 107.10/107.00 area. Exponential reversal signal still valid, rate is two-way but weaker each day. If short—let it work. If today’s rally fails under the 108.00 handle look for a drop into stops under the 107.00/10 area the next 24 hours. Look to add if rate can hit the stops in the 107.00 area near-term. Some topping seen; expect volatility. Bids appear solid but so do offers; exporters likely on the offer all the way to the highs overnight and active the past several days. USD likely not this strong but more benefiting from Yen weakness. Stops likely rolled up under the 107.00 area for today so if a break happens—look for a drop to the 106.00 handle fairly quickly.

Data due Tuesday: All times EASTERN (-5 GMT)

7:50pm JPY Trade Balance
7:50pm JPY CSPI


USD/CHF Daily

Resistance 3: 1.0520
Resistance 2: 1.0480
Resistance 1: 1.0450/60
Latest New York: 1.0457
Support 1: 1.0320/30
Support 2: 1.0300
Support 3: 1.0270/80

Comments
Rate rallies back to resistance, fails at 1.0480 area as expected. Rate stuck in a range but still looking to support/resistance hovering around the 100 bar MA. Overhead resistance now at the 1.0480 area. Rate continues to rotate up to and fail at the 100 bar MA area; a sell off to end the day today would be ideal to set-up for further losses during the week. Buyers appear to be technical traders and expect some momentum accounts on the bid soon. No doubt some bids are profit-taking from the shorts but that won’t last in my view. In my view, the rate needs to be sold on any strength. Hourly sell signals also suggest that the rate is ready to rotate lower again. Look for two-way action overnight into Tuesday.

Data due Tuesday: All times EASTERN (-5 GMT)

4:00am CHF Consumption Indicator


Analysis Provided by: Forexpros.com written by Jason Alan Jankovsky.

Also Check the Forex brokers section.

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.

[ForexAnalysis]

Read the Daily Forex Trading Analysis

Today’s US Dollar Trading
• USD two-way all day
• Starts on the offensive—ends on the defensive
• GBP and EURO at technical resistance.

Overnight Preview
• Look for a quiet evening ahead of FOMC

Looking Ahead
All times EASTERN (-5 GMT)
• 8:30am USD Core Durable Goods Orders m/m
• 8:30am USD Durable Goods Orders m/m
• 10:00am USD New Home Sales
• 10:30am USD Crude Oil Inventories
• 2:15pm USD FOMC Statement
• 2:15pm USD Federal Funds Rate

Summary
Despite a better start overnight the USD was unable to hold significant gains today after the release of disappointing US data gave traders a reason to sell the Greenback. Although the early volatility was important enough to make new highs or lows on the day for the USD it wasn’t enough to put most pairs into new ranges; Forex traders note that volumes were moderate and both sides seemed to find a reason to take a stand. Trading has been muted the past 24 hours with most desks reporting that concern over the FOMC rate announcement due out tomorrow is keeping larger players quiet; although larger names have been seen at the highs or lows today. Cable initially firmed following EURO but took at hit when the UK mortgage numbers overnight were less than inspiring. Falling to a low print at 1.9622 in early New York the GBP reversed course and rallied to a high print at 1.9726 before offers capped the move today. US data lifted both the GBP and the EURO but neither pair could hold gains as both pairs were at technical resistance during the day. EURO stalled just above the 50 bar MA for a high print at 1.5623 before falling back and leaving a long selling wick on the day. I suggested earlier in the day to liquidate your long EURO position and if you are holding longs still be ready to exit those positions overnight. I don’ think the EURO has what it takes to hold above the 50 bar MA near-term. USD/JPY broke down to post a daily low at 107.36 before rallying all the way back to the 108.00 handle; then dropping mid-range on the close. At no time did the rate ever make the impression it intended to break out to a new high or a new low. Traders note that the rate is simply stuck in an existing range and may be there through the FOMC announcement tomorrow. Swissy also broke to new lows at the 1.0348 number before bouncing off the 50 bar and 100 bar MA’s on the daily chart. In my view, the USD/CHF is firming a bit too much to be short. I would look to take the trade off the next 24 hours if the rate continues to gain above the 1.0400 handle near-term; such as overnight. In my opinion, the USD will cover a lot of the same ground tonight and into the FOMC meeting tomorrow. Look for a rally as a selling opportunity.


EUR/USD Daily

Resistance 3: 1.5680
Resistance 2: 1.5650/60
Resistance 1: 1.5620
Latest New York: 1.5567
Support 1: 1.5500/1.5490
Support 2: 1.5470
Support 3: 1.5450

Comments
Rate unable to hold gains after surprise rally into the 1.5620 area; long selling wick companion to the bid wick from Monday. Rate likely stuck in tighter range for now. Russians buying EURO a good sign but watch for model accounts on the bid the next few days. The 50 bar MA offering resistance; close over the 50 bar likely to draw more buying early in the week but for now there is pressure coming on in that area. Bids will likely be in the 1.5500/20 area or so. Expect higher action this week as late shorts get squeezed. If long, better to get flat or reverse.

Data due Wednesday: All times EASTERN (-5 GMT)

4:00am EUR ECB President Trichet Speaks
4:00am EUR Italian Retail Sales m/m


USD/JPY Daily

Resistance 3: 108.80
Resistance 2: 108.50
Resistance 1: 108.20
Latest New York: 107.76
Support 1: 107.20/30
Support 2: 107.00
Support 3: 106.80

Comments
Rate whipsaws around current S/R; unable to gain traction above or below recent boundaries. Volumes lighter and upside resistance is firm at 108.00 area or a shade higher. Failure to close above the 108.00 handle Monday a good sign rate is ready to break back to the lows looking for stops under the 107.10/107.00 area. Exponential reversal signal still valid, rate is two-way but weaker each day. If short—let it work. If today’s rally fails under the 108.00 handle look for a drop into stops under the 107.00/10 area the next 24 hours. Look to add if rate can hit the stops in the 107.00 area near-term. Some topping seen; expect volatility. USD likely not this strong but more benefiting from Yen weakness. Stops likely rolled up under the 107.00 area for today so if a break happens—look for a drop to the 106.00 handle fairly quickly.

Data due Wednesday: All times EASTERN (-5 GMT)


Analysis Provided by: Forexpros.com written by Jason Alan Jankovsky.

Financial spread betting Site.

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.

[ForexAnalysis]

Daily Forex Trading Analysis

Today’s US Dollar Trading
• USD whipsaws after early sideways start
• US data unfriendly to the Greenback
• As expected, FOMC holds rates firm

Overnight Preview
• USD likely to continue to weaken
• EURO above resistance

Looking Ahead
All times EASTERN (-5 GMT)
• 8:30am USD Final GDP q/q
• 8:30am USD Unemployment Claims
• 8:30am USD Final GDP Price Index q/q
• 10:00am USD Existing Home Sales
• 10:35am USD Natural Gas Storage

Summary
As expected the FOMC held interest rates steady and left the discount window on hold too. The statement was full of the usual “Strong Dollar” rhetoric but after the initial brief USD rally into expected S/R the Greenback reversed hard and fell to new lows on the day across the board. Stops were seen in all pairs but active selling of USD was noted by several shops as the USD made highs around the FOMC announcement. Forex traders were not surprised at the strength of the reversal or the speed and many expressed concern that the USD will get ahead of itself on a decline before the ECB has a chance to raise rates next week. GBP rallied for a high print at 1.9771 after the announcement; traders note that stops were elected at 1.9740/50 area after the first push to there was repelled during the day. In other words, shorts sold ahead of the news and placed their stops close-in expecting a drop which never happened. EURO plowed through near-term resistance and is no officially rallying; stops placed around the 1.5630 area were triggered as layered supply above the 1.5600 area was absorbed after the news. EURO now has no top ahead of the 1.5800/20 area some traders say and a sustained rally may be in the works for tomorrow and Friday. Should the EURO clear the 1.5800 area or beyond by the end of the week that would make this month an engulfing month on the charts—a very bullish scenario. USD/JPY failed to inspire trade either way for most of the day preferring to hover at the 108.00 handle until the Fed news; a brief rally to 108.43 high print was sold aggressively and the rate reversed into low prints at 107.65 within minutes. The rate is unable to break out of the 108.40-107.00 range that has plagued this pair for over a week. When it finally goes one way or the other it could be a spectacular move. USD/CHF also reversed hard making lows on the day at 1.0340; traders expect more. Almost lost in the day’s action was earlier US data, Durables were flat and housing was lower; traders expect that more unfriendly news will be seen for tomorrow as well. In my view, nothing to do but buy dips in EURO and add to open shorts in other pairs.


EUR/USD Daily

Resistance 3: 1.5800
Resistance 2: 1.5750/60
Resistance 1: 1.5720
Latest New York: 1.5674
Support 1: 1.5550/60
Support 2: 1.5500
Support 3: 1.5450

Comments
Rate blasts through resistance and makes highs for the week. Better EMU news helps keep the rate firm. US news likely to create volatility. Russians buying EURO again overnight a good sign but watch for model accounts on the bid the next few days. The 50 bar MA offering resistance; close over the 50 bar likely to draw more buying tomorrow. Bids will likely be in the 1.5580 area or so on any meaningful correction. Expect higher action this week as late shorts get squeezed.

Data due Thursday: All times EASTERN (-5 GMT)

2:00am EUR German Import Price Index m/m
4:00am EUR M3 Money Supply y/y


USD/CHF Daily

Resistance 3: 1.0520
Resistance 2: 1.0500
Resistance 1: 1.0470/80
Latest New York: 1.0350
Support 1: 1.0320/30
Support 2: 1.0300
Support 3: 1.0270/80

Comments
Tight range and low volumes overnight; rate likely to whipsaw today so be ready for volatility. Looking to add to position if rate can clear under the 1.0300/10 area. Rate stuck in a range but still looking to support/resistance hovering around the 100 bar MA. Overhead resistance now at the 1.0480 area. Rate continues to rotate around the 100 bar MA area; a sell off to end the day today would be ideal to set-up for further losses during the week. Buyers appear to be technical traders and expect some momentum accounts on the bid soon. No doubt some bids are profit-taking from the shorts but that won’t last in my view. In my view, the rate needs to be sold on any strength. Hourly sell signals also suggest that the rate is ready to rotate lower again.

Data due Thursday: All times EASTERN (-5 GMT)


Analysis Provided by: Forexpros.com written by Jason Alan Jankovsky.

You can also visit our forex brokers section, compare brokers and more.

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.

[ForexAnalysis]

Read the Daily Forex Trading Analysis

Today’s US Dollar Trading
• USD gets hammered
• US data ignored in favor of rising Oil
• Equities pressure USD/JPY

Overnight Preview
• Look for continued weakness
• USD likely to fall overnight

Looking Ahead to Friday
All times EASTERN (-5 GMT)
• 8:30am USD Core PCE Price Index m/m
• 8:30am USD Personal Spending m/m
• 8:30am USD Personal Income m/m
• 9:55am USD Revised Michigan Sentiment

Summary
The Greenback got hammered today as panic hit the equities markets; Crude Oil passes the $140.00/BBL mark and makes a record close. In my view, this is exactly what the USD needs to reach back into new 2008 lows. If you notice, the USD has been over 5% weaker earlier in the year against Yen and CHF while it is stronger against EURO and GBP; I think it is time to remember that panic doesn’t pay. Look for the USD to drop significantly during the early part of the next quarter but let’s not lose focus; the USD will bottom and recover at some point and with equities this cheap you can bet SWF money will be all over the bid on choice stocks soon. That repatriation will make a firm bottom in the USD this year late in my view. On the day, Cable found a top at the 1.9890 area; high print at 1.9897 tracking EURO higher all day. EURO found stops above the 1.5700 area as expected but also found more above the 1.5750 area stalling at a high print of 1.5766 and remaining firm all day. Both EURO and GBP had willing bids all day and saw lots of dip buying; despite good selling by Asian sovereigns overnight. USD/JPY finally broke under the 107.00 handle finding stops in good size at the 106.90 area; low prints 106.60 making a new two-week low. Forex traders note that volumes were good and trade was orderly suggesting that there were quality bids on the break as well as quality offers. Traders expect further losses near-term to close out the quarter. USD/CHF is under the 1.0230 area for a low print at 1.0219 making a mess of the bull’s balance sheets; expect further losses to end the week. In my view, the USD has broken into expected lows and the big question is if the USD can continue to fall; I think that is a slam-dunk given the high price of Oil. Look for the USD to fall overnight on follow-on selling. No US data tomorrow of note so expect continued pressure during the day and for the USD to finish the week somewhat lower.


EUR/USD Daily

Resistance 3: 1.5820
Resistance 2: 1.5800
Resistance 1: 1.5780
Latest New York: 1.5761
Support 1: 1.5620
Support 2: 1.5580
Support 3: 1.5550

Comments
Rate powers higher on Oil, stops and general USD weakness. Stops above the 1.5700 handle; more stops over the 1.5750 and 1.5780 area but offers will likely cap any further strength near-term. Asian sovereign selling seen overnight. US news today likely to create volatility so be ready for whipsaw or a reversal. Should cable break—EURO could go with it. Watch for model accounts on the bid today or Friday. The 50 bar MA likely to offer support should the rate fall back; close over the 50 bar likely to draw more buying to end the week. Bids will likely be in the 1.5580 area or so on any meaningful correction. Expect higher action this week as late shorts get squeezed.

Data due Friday: All times EASTERN (-5 GMT)

All Day EUR German Prelim CPI m/m
4:00am EUR Current Account
5:00am EUR Consumer Confidence
12:30pm EUR ECB President Trichet Speaks


USD/JPY Daily

Resistance 3: 109.00
Resistance 2: 108.80
Resistance 1: 108.50
Latest New York: 106.71
Support 1: 106.40
Support 2: 106.10/20
Support 3: 105.80

Comments
Rate finally breaks as expected, OK to add on the close for additional weakness. Exporters noted on the offer the past 24 hours and the rate breaks below 107.00 with authority. Failure to close above the 108.00 handle Monday a good sign rate is ready to break back to the lows looking for stops under the 107.10/107.00 area. Exponential reversal signal still valid, rate is two-way but weaker each day. If short—let it work. If today’s US data is weak, expect a pullback again to test support. Look to add if rate can hit the stops in the 107.00 area near-term. Some topping seen; expect volatility. USD likely not this strong but more benefiting from Yen weakness. Stops likely rolled up under the 107.00 area for today so if a break happens—look for a drop to the 106.00 handle fairly quickly.

Data due Friday: All times EASTERN (-5 GMT)


Analysis Provided by: Forexpros.com written by Jason Alan Jankovsky.

Also Check the Forex brokers section.

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.

[Airelon]

Could I ask that you keep your Forex review and your thoughts and comments in one thread please? I've went ahead and made it easy for ya by merging all of the existing posts into one thread.

Thanks much!

[ForexAnalysis]

Read the Daily Forex Trading Analysis

Today’s US Dollar Trading
• USD loses ground but attempts a recovery
• Stops run
• Volumes moderate

Overnight Preview
• Two-way action likely

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 10:00am USD ISM Manufacturing Index
• 10:00am USD ISM Manufacturing Prices
• 10:00am USD Construction Spending m/m
• Tentative USD Domestic Vehicle Sales

Expect ISM to remain weak.


Summary
The USD is two-way and whippy today after a losing start to the day. Across the board the USD made monthly lows to end the quarter no doubt creating a lot of risk-aversion liquidation ahead of US data and the holiday-shortened trade week. GBP has upside resistance at 1.9960 area challenged more than once on several rallies but each time the market backed off to trade lower. Into the London fix rumors of buy-needs kept the rate firm but once the fix was gone traders sold the rate lower and the GBP made lows for the day at 1.9878; rate continued to whipsaw short-term accounts as the GBP rallied off the low to trade above the 1.9940 area briefly again. For the most part the EURO had a similar day but dropping Oil prices helped to keep the pressure on more-so than GBP. EURO had a high print at 1.5837 but once the highs were in during European trade the EURO settled back to trade lower all day. Forex traders note that in both pairs volumes were moderate and with a lower close likely all offers. USD/JPY remained on the defensive most of the morning but staged a modest recovery after the London fix as well coming close to the overnight highs with a New York high at 106.25 areas. Traders say the rate is likely to remain two-way as Asian sovereigns have an appetite for USD on the dips while exporters are on the offer during any strength. The rate held the 105.00 handle on the morning break suggesting that a rotation higher might be good for a test of the breakdown area around the 107.50 area near-term; should that be the case there is a lot of volatility there. Swissy weakened as well but held lows at 1.0130 which were never challenged in New York trade. USD/CHF likely to weaken more but the rate wants to rotate high and was the only major pair higher on the day today. Loonie rallied as well and cleared the 1.0200 handle briefly suggesting a lot of two-way action is coming. The rate settled back after scoring a high at 1.0215 in two way action. Traders note that volumes were good in all pairs and more two-way action is due across the board. In my view, the Greenback is set to rotate higher ahead of Non-Farm payrolls later in the week. Although whipsaw is likely as well, I think your best strategy is to sell rallies and wait for the upside correction in USD to fail.


EUR/USD Daily

Resistance 3: 1.5900
Resistance 2: 1.5880
Resistance 1: 1.5830/40
Latest New York: 1.5742
Support 1: 1.5720
Support 2: 1.5680
Support 3: 1.5650

Comments
Rate not supported by higher Oil today suggesting a near-term top. Closing lower suggests some selling pressure is developing. Stops noted under the previous lows layered under 1.5700 traders say. Closes near the 1.5800 handle from last week, more upside likely but a pullback is needed. Asian sovereign selling seen overnight. US news today likely to create volatility so be ready for whipsaw or a reversal. Should cable break—EURO could go with it. Watch for model accounts on the bid today; those guys love to buy highs. The 50 bar MA likely to offer support should the rate fall back; bids will likely be in the 1.5580 area or so on any meaningful correction. COT data show a flip to EURO longs; could be a clue for a top.

Data due Tuesday: All times EASTERN (-5 GMT)

3:55am EUR German Unemployment Change
5:00am EUR Unemployment Rate


USD/JPY Daily

Resistance 3: 107.80
Resistance 2: 107.20/30
Resistance 1: 106.50
Latest New York: 106.23
Support 1: 10500/104.90
Support 2: 104.50
Support 3: 104.20

Comments
Rate continues on follow-on weakness, strong bids noted suggesting a whipsaw bounce is coming. Close back over the 106.00 area suggests a rally soon. Today’s dip under the 105.00 handle lacked conviction and a potential rally may develop early; sell that rally if we get it. In the meantime, OK to liquidate shorts and wait. Exponential reversal signal still valid, rate is two-way but weaker each day. Stops in the 105.80 area cleared overnight; traders note stops were both ways. COT data show a flip to Yen longs suggesting a bottom is in.

Data due Tuesday: All times EASTERN (-5 GMT)

7:50pm JPY Monetary Base y/y


Analysis Provided by: Forexpros.com written by Jason Alan Jankovsky.

Also Check the Forex brokers section.

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.

[ForexAnalysis]

Read the Daily Forex Trading Analysis

Today’s US Dollar Trading
• ISM better than expected
• USD falls to support and then rallies
• EURO fails at resistance

Overnight Preview
• Look for the USD to consolidate in two-way action

Looking Ahead to Wednesday
All times EASTERN (-5 GMT)
• 7:30am USD Challenger Job Cuts y/y
• 8:15am USD ADP Nonfarm Employment Change
• 10:00am USD Factory Orders m/m
• 10:30am USD Crude Oil Inventories
• 11:00am USD Treasury Sec Paulson Speaks
• 12:00pm USD FOMC Member Mishkin Speaks

Summary
The USD is firming into the New York close after remaining two-way all day; US data helped the Greenback a bit as it came in slightly positive. Firming stocks after the weakness early in the day a positive for some pairs as well. Excessive volatility worked against both sides today as most pairs were whipsawed over close to a 100 point range during the day. GBP failed to attracted bids after initially dropping to the 1.9930 area after the highs early in New York at 2.0009; a minor bounce to the 1.9960 area was sold and the rate dialed to hold gains finishing back near the 1.9930 area. Technically the GBP appears to be forming a top as volumes were light and the crosses are correcting lower on the GBP side. EURO had the highs challenged around mid-day after falling back from the 1.5820 area in the morning; lows were set at 1.5722 before a rally extended the highs above the 1.5820 high for another high print at 1.5828 before retreating; EURO dropped back to the 1.5780 area on the close and looks vulnerable to topping as well. Today’s ISM data helped the USD against the majors but was still considered benign, the two-way whipsaw against the GBP and EURO most likely due to oil volatility and equities pricing. USD/JPY held support at the 105.20/30 area with a low print at 105.22 before rallying all day to close back above the 106.00 handle; overnight highs at 106.40 likely to hold further offers with stops layered above. Forex traders note that the Yen crosses will likely drive near-term sentiment in USD/JPY as the US data due out this week is fairly well expected to be USD neutral to unfriendly. Tomorrow’s ADP private payrolls data is highly inaccurate and will likely create volatility but no real direction. The USD is likely to remain under upside bias until the Thursday NFP data but expect two-way action and a lot of whipsaw as the USD corrects higher back to near-term resistance. I would look for the Greenback to rally another two handles before the selling pressure comes on in force again. Expect two-way consolidation again overnight.


GBP/USD Daily

Resistance 3: 2.0080
Resistance 2: 2.0050
Resistance 1: 2.0000/10
Latest New York: 1.9941
Support 1: 1.9880
Support 2: 1.9820
Support 3: 1.9780

Comments
Rate softens during US trade slightly, US data slightly positive for the USD. Stops the main driver over the 1.9970/80 area with more over the 2.00 handle. Traders expect GBP to track EURO on a break. UK housing prices lower than expected had no effect; traders now expect a top to form as the rate had thinner volume on the rally into the reported option defense. Rate fails at high prints near previous resistance so a correction is still developing. Spillover weakness/strength from EURO still likely all week this week. Continue to expect a lot of cross-trading. US data today may create some whipsaw again.

Data due Wednesday: All times EASTERN (-5 GMT)

4:30am GBP Construction PMI
4:30am GBP Housing Equity Withdrawal q/q


EUR/USD Daily

Resistance 3: 1.5900
Resistance 2: 1.5880
Resistance 1: 1.5830/40
Latest New York: 1.5784
Support 1: 1.5720
Support 2: 1.5680
Support 3: 1.5650

Comments
Rate not supported by higher Oil again today suggesting a near-term top. Rally then breaks after attempted highs suggests some selling pressure is developing. Stops noted under the previous lows layered under 1.5700 traders say. Asian sovereign selling seen overnight; along with Swiss selling. US news today likely to create volatility so be ready for whipsaw or a reversal. Should cable break—EURO could go with it. Watch for model accounts on the bid today; those guys love to buy highs. The 50 bar MA likely to offer support should the rate fall back; bids will likely be in the 1.5580 area or so on any meaningful correction. Equities weaker also no help.

Data due Wednesday: All times EASTERN (-5 GMT)

3:15am EUR ECB President Trichet Speaks
5:00am EUR PPI m/m


Analysis Provided by: Forexpros.com written by Jason Alan Jankovsky.

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