Today’s US Dollar Trading
• USD two-way overnight
• Weakens in NY trade
• All eyes on US data tomorrow
• Look for the USD to consolidate with a lower tone
Looking Ahead to Thursday All times EASTERN (-5 GMT)
• 8:30am USD Unemployment Claims
• 10:00am USD Philadelphia Fed Manufacturing Index
• 10:00am USD Leading Index m/m
• 10:35am USD Natural Gas Storage
• 2:30pm USD FOMC Member Kohn Speaks
The USD is lower to end the day in New York after a two-way overnight session that saw the USD on the best levels of the day in early US trade. Overseas data was benign and after the London fix the Greenback began to slide off as traders squared positions ahead of US economic news tomorrow. Technical trading was the rule today and most action was on the sell side of USD as the majors were able to hold above important S/R during the day. Cable rallied over the 1.9600 handle briefly as stops were elected in both directions from overnight trade. Finding support again at the 1.9470 area stops from late shorts again were placed in range and the rate rallied on moderate volume. Making an inverted hammer on the daily charts traders expect the GBP to rally again on Thursday after US data; ahead of there expect a lot of two-way action and potential whipsaw although the 1.9470 area appears solid as support. EURO rallied all day and challenged overnight Asian highs above the 1.5520 handle late in the day but high prints at 1.5539 remained on the day; more two-way action is expected tonight ahead of US data in the morning. USD/JPY fell through light stops to make lows on the day at the 107.70 area before rebounding; Forex traders note that stops under the 107.50 area remain untouched for now and are building into the end of the week. Without a bit of upside help the rate appears ready to drop into reported support under the 107.00 handle. Swissy is also under pressure to end the day dropping to a low print at 1.0355 before a slight bounce; traders note that the rate is under the important 100 bar MA again into the close. Despite a rather lackluster session with little news to focus on the USD is weaker on technical factors again. I would look for the Greenback to continue to consolidate with a weaker tone overnight. Look for the majors to advance again during the day tomorrow as US news is not likely to be friendly in the morning.
Resistance 3: 1.5600
Resistance 2: 1.5580
Resistance 1: 1.5550/60
Latest New York: 1.5526
Support 1: 1.5440/50
Support 2: 1.5380
Support 3: 1.5350
Near the highs around the 1.5550 area suggests more follow-on buying. Rate remains trapped inside range; pressured along with GBP but holds support at 1.5470 area. Looking for a long on next push into highs—then a pullback. If rate can clear the 1.5550 area and then fall to support around the 1.5500 area I think we are on the buy side at that point. Expect higher action all week as late shorts get squeezed. Rate finds support as more rumors of Russian and Mid-East buyers; Swiss private bank on the offer overnight. Should rate put in a long tail today a buy might be on the table. Stops and bids noted at the 1.5420 area in size; more said to be resting at the 1.5500 area; all in range. Overhead resistance appears firm at 1.5550 with stops above.
Data due Thursday: All times EASTERN (-5 GMT)
4:00am EUR Italian Unemployment Rate
Resistance 3: 109.20
Resistance 2: 108.80
Resistance 1: 108.50/60
Latest New York: 107.88
Support 1: 107.60/70
Support 2: 107.20/30
Support 3: 106.80
Exponential reversal signal overnight, need to sell the rate. If short—let it work. Close under the 108.00 area significant today; look to add if rate can hit the stops in the 107.40/50 area near-term. Some topping seen; expect volatility. Today’s close under the 200 bar MA likely to draw some sympathy selling but watch volumes. Bids appear solid but so do offers; exporters on the offer all the way to the top overnight and active the past several days. Technical traders note fib defense area around today’s highs and never forget that the fundamentals haven’t changed one bit in the last week or so. USD likely not this strong but more benefiting from Yen weakness. Stops likely rolled up under the 107.40 area again for today so if a break happens—look for a drop to the 106.00 handle fairly quickly. Bulls likely to take gains by end of day again if rumored stops above the 108.60/70 area are left untouched.
Data due Thursday: All times EASTERN (-5 GMT)
Tentative JPY BOJ Governor Shirakawa Speaks
Analysis Provided by: Forexpros.com written by Jason Alan Jankovsky.
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