Today’s US Dollar Trading
USD mixed after New York
Stocks continue to lift USD/JPY
Overnight news surprises to the upside
Overnight Preview
Look for additional two-way trade to consolidate
Fade into New York expected
Looking Ahead
Wednesday is Money Management Part II in members-only broadcast room 11:00 Am CST
Thursday Balance of Trade
Friday TICS
Summary
The USD is mixed-to-weaker to end New York after initially starting the day in two-way action. Overnight the Greenback was tracking equities nicely and remained on the firm side staying mostly within Monday’s ranges and hovering around the New York closing levels. Firmer equities in Europe helped keep the USD off the lows seen against Yen and once the DJIA opened the USD/JPY remained solidly in the 107.00 handle all day. Extending gains after the London fix the USD/JPY was unable to score a new overnight high but finished the day around the 107.20/30 area making a lot of bears nervous. Stops in that pair are likely continuing to build above the 108.00/10 area but chatter suggests that more are placed in the 107.80 area close-in. Cable rallied on the back of better than expected CPI data after two-way action saw sellers try to take a stand at the 1.9500/30 area. Closing up near the 1.9620 area after the rally extended the rate looks ready to tackle offers said to be waiting at the 1.9650/60 area. Volumes on the move were not large and some desks report interest to sell on further strength. EURO had a similar day scoring stops placed at the 1.4560 area and extending the rally to the 1.4610/20 area; high print at 1.4617 before dropping back into the 1.4580 area. Volumes not impressive and the rally may have been due to thin conditions. Model and CTA-type accounts were noted on the bid suggesting that the rally may not have much more to go. Both the 50 bar and 100 Bar MA’s have offered resistance on the last few trading sessions and should that resistance hold during the next 24 hours a rotation lower in the EURO can be expected. In my view, the rally in the majors today is a “head fake”; be careful looking at the long side as volumes have been light and the only driver for the move has been poorly placed stops. Traders report few active players suggesting that the rally may not have a lot left in it. Look for a two-way overnight session and technical trade as there is light news for the rest of the week. A surprise may ignite some volatility and that is what we want to hold these USD longs.
USD/JPY Daily
R3: 108.00/10
R2: 107.80/90
R1: 107.50/60
Current Price: 107.25
S1: 107.00
S2: 106.80
S3: 106.60
Rate continues to grind sideways in range-bound action, rallies are sold and dips are bought but dips seem to be getting slightly higher in my view. Coiling for the past three weeks continues to store a huge amount of energy and when the rate breaks out the move could be 3 handles. Look for light volume breaks bought back hard; close over the 107.60 area continues to be the goal for bulls. Stops likely raised from 106.00 to 106.50 area to offer some downside potential.
EURO/USD Daily
R3: 1.4680
R2: 1.4660
R1: 1.4610/20
Current Price: 1.4590
S1: 1.4550
S2: 1.4500
S3: 1.4480
Rate retraces to the 50 bar MA which is tracking lower suggesting that the rate is testing previous S/R but bears are trying to gain control. Volumes not very large suggesting the past three days of higher prices are a “dead cat bounce”. Look for rate to suffer selling pressure above the 1.4620 area and stops for longs likely moved close-in under the 1.4550 area of previous stops. Rate needs inside range day closing lower for Wednesday to disappoint the late bulls.
Analysis by: Jason Alan Jankovsky in Association with The Forex Edge
Publisher:
ForexPros.com
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