Here's Our Daily Forex Analysis

Today’s US Dollar Trading

• USD starts lower in Asia, rallies in Europe
• Rallies on Durables data then fades
• Ends New York Mixed

Overnight Preview

• Look for the USD to continue under pressure ahead of GDP tomorrow
• Volumes should drop off also

Looking Ahead
All times EASTERN (-5 GMT)
• 8:30am USD Prelim GDP q/q 0.9%
• 8:30am USD Prelim GDP Price Index q/q 2.6%
• 8:30am USD Unemployment Claims 370K
• 10:30am USD Crude Oil Inventories
• 10:30am USD Natural Gas Storage
• 2:30pm USD Fed Chairman Bernanke Speaks
• 7:00pm USD Fed Vice Chairman Kohn Speaks

Summary
The USD ends the day mixed after a slow start in Asia; initial early strength after Durable Goods data hit the street fades into the London Fix. The USD went nowhere after the fix and forex traders complained of low volumes, thin conditions and dull ranges. After the better-than-expected Durables data provided a solid rally the sellers came out at expected resistance and the USD never challenged those prices again all day making for a toppy chart formation. Model and Momentum accounts were seen in some pairs on the bid for USD suggesting that the potential top may actually be in place across the board. Some price action after the best levels of the day for the USD offer compelling reasons to stay on the short side through the end of the week. Cable advanced to the 1.9830 area overnight Asia only to be met with selling that found close-in stops at the 1.9770 area and below for a low print after durables at 1.9703; bids lifted the rate back over the 1.9800 handle to trade firm all day in less than two hours. A 100 point move in both directions whipsawing both sides to finish higher on the day; not a good sign for the bears. EURO also stopped short on support, holding the 1.5600 handle after a sharp stop-driven break for a low print at 1.5603 before sovereign names were seen on the bid. The 50 bar MA comes in as support at the 1.5661 and although a technical sign of potential slippage; the fact that the rate found no real stops in size on a break below the MA suggests that there is no one willing to sell under the 1.5660 area. Now that weak longs have been cleared, all the remains is to see if late shorts sold EURO into the hole today. Should that be the case; expect a rally the next 24-48 hours. USD/JPY rallied through stops and resistance for a high print at 105.33 clearing all the weak shorts out before dropping back to trade 104.60 area most of the afternoon. A very long selling wick on USD/JPY today suggests that the rate is due for a retest of the near-term lows under the 103.00 area; some desks report that selling interest at the highs was from exporters and semi-official names. Swissy had a similar day but finished off the highs and nowhere near the real resistance numbers the active bears would like to see. Highs at 1.0426 were never challenged and the rate fell back to under the 1.0390 breakdown number. A close below the 1.0390 area argues for a test of the 1.0280 area again as volumes on the rally were light. Look for a quiet evening ahead of GDP tomorrow.

EUR/USD Daily

Resistance 3: 1.5880
Resistance 2: 1.5850
Resistance 1: 1.5810/20
Latest New York: 1.5645
Support 1: 1.5620
Support 2: 1.5600/1.5590
Support 3: 1.5550

Comments
Rate crosses the 50 bar MA with higher volume; more losses on the way but move into the stops finds no one home; selling pressure likely not big enough now to move below the 1.5600 area easily. Support at 1.5550 likely to hold on further weakness. Overhead resistance appears firmer on the approach to the 1.5800/20 area with stops said to be out of range above around the 1.5850 area. Traders note that the rate feels “heavy” to start the week and warn of a potential overhang of stale longs; which may have been cleared on today’s dip to 1.5600. Stops under the 1.5700 area were in size overnight and volume was good. Look for model and momentum accounts active tonight—we need them on the offer as the break lower was negated by the bounce. Adding to the potential is the COT data showing a flip to net long from net short before the holiday; a washout is likely in my view and that may have been the move lower today.

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

3:55am EUR German Unemployment Change -25K
4:00am EUR M3 Money Supply y/y 10.3%
5:00am EUR Consumer Confidence -12


USD/JPY Daily

Resistance 3: 105.80
Resistance 2: 105.50
Resistance 1: 105.20/30
Latest New York: 104.62
Support 1: 104.20/30
Support 2: 103.80
Support 3: 103.20/30

Comments
Rate powers through offers at the 104.50 area and stops drive the rate to next resistance at the 104.80 area; fails at the highs. After US news is out this morning, expect a rally into the 105.10/20 area to be sold; we opened an aggressive short in that area today. Caution on the potential top is the rate closing over the 100 bar MA today. COT data showing an increase of net JPY longs making the upside potential for the USD a bit higher in my view; but that was likely the pop this morning. Stops the other side of 104.50 were in size suggesting that speculators got heavily short near current market pricing as 104.50 area is in range with the recent weekly highs. This week’s data may support near-term as the USD has had a lot of bad press the past quarter and has managed a firm start to the year; perhaps the Yen has a further downside correction to go before the USD bears are again out in force.

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

7:15pm JPY Manufacturing PMI 48.6
7:30pm JPY Core CPI y/y 1.0%
7:30pm JPY Core Tokyo CPI y/y 0.9%
7:30pm JPY Overall Household Spending y/y -0.7%
7:30pm JPY Unemployment Rate 3.9%
7:50pm JPY Industrial Production m/m


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.

Read the Daily Forex Analysis

Overnight Asia/Europe

• USD mixed, volumes modest
• UK news disappoints Cable
• Technical trade overnight

Today’s Economic Reports
All times EASTERN (-5 GMT)
• 10:00am USD ISM Manufacturing Index
• 10:00am USD ISM Manufacturing Prices
• 10:00am USD Construction Spending m/m

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 9:00am USD Fed Chairman Bernanke Speaks
• 10:00am USD Factory Orders m/m 0.0%
• Tentative USD Domestic Vehicle Sales 10.8M

Summary
The USD is starting the week mixed in New York this morning as overseas news drives early interest in the USD. Negative news in the UK prompted a strong selling day in the GBP today, Cable dropping to a low print at 1.9595 before attempting a recovery. Reports of forex traders increasing short sales of UK retailers’ stocks, negative press on Prime Minister Brown and reports that a large number of UK households have slipped into negative equity weighed on Sterling to start. Cross spreaders have had a great start to the week as the Sterling side of everything has pushed all the rates sharply higher. This has hurt EURO as the two pairs are tracking each other; EURO unable to extend gains from Friday and is trapped in the lower end of its early range; low prints at 1.5513 and highs at 1.5571 are making for dull trade. Good demand from Asian sovereign names was seen traders say around the opening range at 1.5550 area but offers from a well-respected German name capped the potential rally early. EURO trading right down the middle of the range in early New York at 1.5530 area. USD/JPY is slightly weaker with lows at 104.64; traders note stops on the break triggered at 104.90 area and the USD bulls are now on the defense. Asian volumes were lighter but the USD/JPY will likely remain on the defensive this week as no real news from the Japanese is seen as potentially market moving but US data due later will likely have an impact; look for the rate to continue to trade two-way with a lower bias for the week. If holding shorts in the rate look to add soon depending on the quality of the close today. Ideally, you would like a failed low-volume rally to sell into. Swissy continues to grind lower as well but has found some technical support overnight at the May daily pivot point at 1.0390; Monday’s low so far at 1.0389. Traders note that large stops are building in the 103.80/90 area suggesting that the late longs form last week are set to bail. Support is not heavy until the 1.0280 area and a hard break could be in the works there. In my view, the USD is set to resume its downward action this week. I would look for two-way action into the NFP data on Thursday with a break coming later in the week. For the most part the higher action against the GBP is a near-term “head fake” and not indicative of the overall market bias. Look for the EURO and GBP to recover higher by mid week.


GBP/USD Daily

Resistance 3: 1.9780
Resistance 2: 1.9720
Resistance 1: 1.9680
Latest New York: 1.9610
Support 1: 1.9600
Support 2: 1.9550
Support 3: 1.9520

Comments
Rate reverses hard again after strong rally on Friday, Rate likely to see support come in around the 1.9630 area but volatility could whipsaw from that area. Fundamentals still suggest a lower GBP and the failure to extend gains above the 1.9850 area so soon after Friday’s reversal argue for a continued downside after a bounce is possible. Continue to expect a lot of sympathy trade with EURO; the cross-spreaders are having a field day with the Sterling crosses and I think the GBP may track EURO near-term. Need a close below the 100 bar MA to build argument for the short but volatility is higher so expect a rally back to test the breakdown.

Not a lot to do but wait in my view.

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

Tentative GBP Halifax House Price Index m/m -1.1%
4:30am GBP Construction PMI 45.7
7:01pm GBP Consumer Confidence Index 68


USD/CHF Daily

Resistance 3: 1.0550
Resistance 2: 1.0500/10
Resistance 1: 1.0480
Latest New York: 1.0422
Support 1: 1.0380
Support 2: 1.0350
Support 3: 1.0310/20

Comments
Rate weakens in early Asia and now remains two-way in light directionless trade. Traders say stops are likely building under the 103.80 area and a drop into lows mid-week is expected now that the rate failed again at the 1.0520 area. The late longs will have to bail if the rate slides back under the 1.0400 area; some of them likely out overnight. Look for rallies to be sold and the 104.80 area to hold key resistance on an upside rally. News this week is likely to remain non-eventful until NFP later. In my view, the rate needs to be sold on any strength; possible short at the 1.0450/60 area for today but that is a long-shot due to the trade under the 1.0400 area already.

Looking to re-short the next 24 hours—our stop just close enough today to tag us out.

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

1:45am CHF CPI m/m 0.4%


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.

Daily Forex Trading Analysis

Today’s US Dollar Trading

• USD mixed, US data no help
• Stops drive a lot of early trade
• S/R broken but the majors bounce back

Overnight Preview

• USD likely to trade two-way
• Consolidation ahead of the news later in the week likely

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 9:00am USD Fed Chairman Bernanke Speaks
• 10:00am USD Factory Orders m/m 0.0%
• Tentative USD Domestic Vehicle Sales 10.8M

Summary
The USD ends the day mixed after starting overnight mixed against the majors. Despite slightly better-than-expected US data this morning the USD sold off to make lows against most pairs by about the London Fix; after that the Greenback settled into two-way forex trade that gradually ground higher to end the day mid-range. Stops were the larger part of the day’s action traders say with only the GBP dropping into technical support. For the most part the USD fell back to test recent S/R and more technical two-way trade is expected overnight as fundamental news is light ahead of NFP later this week. Cable fell back from a high print overnight at 1.9776 to post a New York low at 1.9595 before rebounding; holding above the 1.9630 area is a good clue the rate will rotate higher the next 24 hours or so. Volumes were only moderate traders say so it is possible that GBP will remain two-way within existing S/R. EURO fell through support on stop driven trade for a low print at 1.5485 before rallying out of the hole to post a high print at 1.5591 before offers capped the rally. Again, traders say volumes were only moderate and the rate is expected to remain range bound. Both pairs appear to be tracking one another so aggressive traders can look to buy dips and you can expect a signal the next 24 hours or so. USD/JPY fell through several layers of support as well dropping to a low print on stops at 104.01 before bouncing to the 104.50 area. Stops under the 104.50 area were absorbed easily but offers were finally able to push the rate into the 104.20 area and once cleared the rate rebounded on profit-taking. Swissy had an identical day but fell through the 1.0380/90 area considered to be the monthly pivot point; closing under the 1.0350 area the rate looks for more weakness near-term but as in other rates analysts expect two-way trade. Looking ahead the next 24 hours I would expect the USD to consolidate within existing ranges. Look for more opportunity to short the USD on strength near-term.


GBP/USD Daily

Resistance 3: 1.9780
Resistance 2: 1.9720
Resistance 1: 1.9680
Latest New York: 1.9660
Support 1: 1.9600/1.9590
Support 2: 1.9550
Support 3: 1.9520

Comments
Long wick suggests bid pressure for two-way action coming, rumors of official demand lift rate off the lows around the 1.9590 area; failure to put on weight above the 1.9700 area suggests rate will consolidate lower. Lots of potential for day traders the next 24-48 hours as the rate is likely to stay range bound ahead of US data later in the week. Fundamentals still suggest a lower GBP and the failure to extend gains above the 1.9850 area so soon after Friday’s reversal argue for a continued downside after a bounce is possible. Continue to expect a lot of sympathy trade with EURO; the cross-spreaders are having a field day with the Sterling crosses and I think the GBP may track EURO near-term. Need a close below the 100 bar MA to build argument for the short but volatility is higher so expect a rally back to test the breakdown, expect continued whipsaw.

Not a lot to do but wait in my view.

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

Tentative GBP Halifax House Price Index m/m -1.1%
4:30am GBP Construction PMI 45.7
7:01pm GBP Consumer Confidence Index 68


USD/JPY Daily

Resistance 3: 105.50
Resistance 2: 105.20
Resistance 1: 104.80
Latest New York: 104.49
Support 1: 104.00
Support 2: 103.70/80
Support 3: 103.40/50

Comments
Rate broke into stops under the 104.20 area but no one was home and the rate recovered after the move. Not likely to see further weakness without an attempt at a rally in my view. Monday’s close leaves a doubt to the potential; expect lot’s of two-way action and the rate is likely to cover a lot of the same ground twice the next 24-48 hours. Stops the other side of 105.80 are in size suggesting that speculators got heavily short last week. This week’s data may be largely ignored until NFP out later in the week.

Look for stops to be raised up by the longs this week and some should be resting under today’s lows around the 104.50 area (likely cleared with today’s drop)

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

9:00am JPY BOJ Governor Shirakawa Speaks
7:50pm JPY Capital Spending q/q -9.6%


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.

Daily Forex Trading Analysis

Today’s US Dollar Trading
• Bernanke comments roil the USD, active buying lifts into resistance
• Volumes die after initial lift
• USD falls back late to reverse gains.

Overnight Preview
• USD likely to drop further overnight
• Expect two-way action

Looking Ahead to Wednesday
All times EASTERN (-5 GMT)
• 7:30am USD Challenger Job Cuts y/y 27.4%
• 8:15am USD ADP Nonfarm Employment Change -30K
• 8:30am USD Nonfarm Productivity q/q 2.5%
• 8:30am USD Unit Labor Costs q/q 2.0%
• 10:00am USD ISM Non-Manufacturing Composite 51.0
• 10:35am USD Crude Oil Inventories -8.8M


Summary
Today’s USD trading offered a bit of a surprise as Fed Chair Ben Bernanke spoke openly about the desire for a higher USD on world markets. Initially sparking a massive short-covering rally the comments panicked some traders into aggressive buying. Better-positioned traders used the rally to open aggressive shorts or to add to existing shorts as the resulting rally failed to trigger any technical reasons to hold long USD. In fact, quite the opposite in my view. With the highest single volume seen in weeks on the day, none of the major pairs advanced beyond any near term technical resistance or support. As I mentioned this morning, the entire move was a sucker play and a bull-trap. Less-experienced forex traders panicked into a long USD position only to be caught in the market at the close with no gain. Although the ranges were impressive, the USD failed to hold gains across the board. High prints were sold and never challenged twice suggesting that the rates had no follow-through interest past the first rush of panic. For the record, GBP fell back to the 1.9600 area; low print at 1.9604 before sovereign demand emerged and the rate rallied back to close above the 1.9630 area making for a technical bottom. EURO fell through stops for a low print at 1.5410 but found solid bids to post a late rally back to the 1.5465 area. USD/JPY rallied on stops and active buying for a high print at 105.57 but found large offers and fell back under the 104.80 area on the close making for a large selling wick on the day. Swissy whipsawed as well, high prints at 1.0492 before dropping back to close a full handle lower at 1.03895 area. Across the board, the USD whipsawed everybody and once the dust settled—there was no change to the big picture making today a great day to sell USD. Look for tomorrow’s ADP private payrolls data to be unfriendly to the USD and the sell-off to resume in earnest.


EUR/USD Daily

Resistance 3: 1.5650
Resistance 2: 1.5620/30
Resistance 1: 1.5550
Latest New York: 1.5460
Support 1: 1.5410/20
Support 2: 1.5380
Support 3: 1.5330

Comments
Bernanke comments create a bear-trap sell-off; aggressive traders can get long again anytime as the rate fails to attract enough active selling. Late shorts getting creamed on the close. Volumes still only moderate but sellers can’t get the edge. Favor the long side on dips; upside bias still remains and a limit order is the way to go I think. Weekly studies show buy signals as well. Support at 1.5500 gave way to light stops after the news but the rate found bids and now has crossed the opening range. The bottom is in my view, Overhead resistance appears firmer on the approach to the 1.5800/20 area which is a long ways from here now. Look for model and momentum accounts active on the offer overnight Monday and/or Tuesday.

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

3:30am EUR ECB President Trichet Speaks
4:00am EUR Services PMI (r) 50.6
5:00am EUR Retail Sales m/m 0.2%


USD/JPY Daily

Resistance 3: 105.80
Resistance 2: 105.50/60
Resistance 1: 105.30
Latest New York: 105.20
Support 1: 104.20/30
Support 2: 103.70/80
Support 3: 103.40/50

Comments
Volumes died back to zero once the Bernanke comments were out; lack of follow-through suggests a total head-fake for the longs. Hold shorts—nothing to do but wait as the bulls run for the exits. Expect lots of two-way action and the rate is likely to cover a lot of the same ground twice the next 24-48 hours. This week’s data may be largely ignored until NFP out later in the week. Rate is probing for stops on the other side of the 104.00 handle and first attempt cleared them all as the rate topped 105.20. Longs likely rolling stops up underneath close-in so expect volatility later today.

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


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.

Read Daily Forex Analysis

Today’s US Dollar Trading
• USD reverses from highs overnight, ends mixed
• US data neutral to favorable but no follow-through
• Volumes lighter as traders are confused

Overnight Preview
• Traders expect two-way action with the majors to consolidate
• Likely the USD will remain technical until NFP on Friday

Looking Ahead to Thursday
All times EASTERN (-5 GMT)
• 8:30am USD Unemployment Claims 374K
• 10:35am USD Natural Gas Storage
• 12:00pm USD Philadelphia Fed President Plosser Speaks


Summary
Despite neutral-to-better US data today the USD was unable to extend gains from yesterday and ended the day mixed. Better against GBP, the Greenback pushed Cable into early lows at 1.9424 after clearing stops under the 1.9500 handle in Europe. Forex traders note that cross-spreaders are on the offer and most of the action was related to non-USD pairs. Although the rate was on the defense most of the day traders report nice bids from sovereign names supported on every dip. Offers are said to be building around the 1.5480 area with stops layered above suggesting that late shorts are playing a very tight stop. EURO fell back a bit but was supported as well on dips; low prints at 1.5418 were never challenged and as oil prices rose and fell so did EURO making for whippy forex trading. Traders note that Russian names were active matching other calls for sovereign interest on the lows. Analysts remind that the 1.5500 area likely to offer at least one pullback if the rate rallies but stops are just above suggesting late shorts are running tight risk control similar to GBP. USD/JPY had a tight two-way range today but still inside yesterday; finishing back above the 105.00 handle at around the 105.15 area; large bids said to be under the rate around the 104.40 area but lows at 104.52 left those unchallenged. Traders note that volumes were light on the day and that down action appears to have some teeth to it but caution that the stops are still higher; roughly the 105.50/60 area. Could have some whipsaw also overnight. Swissy was firm around the 1.0420 area to end the day after bids were uncovered in the 1.0350/60 area this morning. Positive ADP data lifted the USD off of the lows but offers above the 1.0440 area contained the rally. Traders expect overhead resistance to hold but the rally could extend to 1.0520 area near-term. In my view, the USD went nowhere today and with good news out of the way it is likely that NFP will disappoint. How the market trades the next 24 hours is important to the set-up; I am looking for quiet two-way action to end in USD weakness by this time tomorrow. I don’t think the Greenback has what it takes to lift into new weekly highs when facing down a serious piece of data later this week. Should be a quiet overnight session;


GBP/USD Daily

Resistance 3: 1.9720
Resistance 2: 1.9680
Resistance 1: 1.9630/40
Latest New York: 1.9545
Support 1: 1.9520/30
Support 2: 1.9500
Support 3: 1.9480

Comments
After all was said and done today, the GBP traded mostly sideways on light volumes. Dips were bought by large names traders say. Stops drive rate into the lows but bids and rumors of sovereign buys hold rate at the 1.9450/60 area on light volume to start New York. Trading in sympathy with EURO continues and EURO strength likely to spillover eventually into cable. Stopped out of longs overnight; OK to look at the long side again as support may be forming at current levels; might want to wait 24 hours. Lots of potential for day traders the next 24-48 hours as the rate is likely to stay range bound ahead of US data later in the week. Continue to expect a lot of sympathy trade with EURO; the cross-spreaders are having a field day with the Sterling crosses and I think the GBP may track EURO near-term. Expect continued whipsaw around US news this morning. Bernanke comments a total head-fake in my view.

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

Tentative GBP Halifax House Price Index m/m -1.1%
Tentative GBP MPC Rate Statement
7:00am GBP Official Bank Rate


USD/JPY Daily

Resistance 3: 105.80
Resistance 2: 105.50/60
Resistance 1: 105.30
Latest New York: 105.27
Support 1: 104.40/50
Support 2: 104.00/10
Support 3: 103.70/80

Comments
Rate is stuck in-range; no follow-through either way but longs getting nervous I think. Expect more selling on overnight strength. Hold shorts—nothing to do but wait as the bulls run for the exits. Model accounts on the bid last night a good sign the rate will fall back. Expect lots of two-way action and the rate is likely to cover a lot of the same ground twice the next 24-48 hours. This week’s data may be largely ignored until NFP out later in the week. Longs likely rolling stops up underneath close-in so expect volatility later today.

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


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.

Read the Daily Forex Trading Analysis

Overnight Asia/Europe

• USD quiet ahead of NFP
• Technical trade in quiet volumes
• Traders sidelined

Today’s Economic Reports
All times EASTERN (-5 GMT)
• 8:30am USD Nonfarm Employment Change -57K
• 8:30am USD Unemployment Rate 5.1%
• 8:30am USD Average Hourly Earnings m/m 0.2%
• 8:45am USD Fed Governor Kroszner Speaks
• 10:00am USD Wholesale Inventories m/m 0.4%
• 3:00pm USD Consumer Credit m/m 7.3B

Looking Ahead to Monday
All times EASTERN (-5 GMT)
• 10:00am USD Pending Home Sales m/m -1.0%

Summary
The USD is mixed to start New York; overnight action was subdued with ranges modest as traders get ready for the NFP report due out shortly. The majors remained inside established ranges quietly trading from technical support to resistance with a wary eye to close-in stops. Although none of the pairs ventured into the area of potential stops analysts remind that there is option expiries, fib retracements, trend line S/R and pivot points all within a few pips of this week’s highs and lows; should the NFP surprise one way or the other this morning the USD could be in for a wild ride to end the week. As expected, offers were seen in both Cable and EURO into the highs overnight as well as bids into the lows as large traders took advantage of both sides. GBP had a high print in Asia at 1.9608 before offers capped the move; drifting to lows in Europe at 1.9535 before bids lifted the rate to the 1.9570 area in light trade to start New York. EURO made early highs on follow-on buying as expected for a high print at 1.5619 before offers ahead of stops said to be resting at 1.5625 capped the move leaving stops untouched for now. Lows were a respectable 1.5571 showing the bulls aren’t letting go of the market ahead of US data today. Forex Traders report large bids on the dip and so far they are being absorbed. If those offers are late shorts attempting to get in ahead of a break that would explain the close-in stops layered above the 1.5625 area. USD/JPY is firmer despite the USD weakness elsewhere; staying firm above the 106.00 handle for a high print at 106.29 but not finding stops said to be above the 106.25 area. Lows were 105.82 making for a tight range and the rate is 106.15 in early New York; the only pair higher on the day. Swissy again closed below the 100 bar MA yesterday and weakness is evident, lows at 1.0370 and the rate is near the lows at 1.0384 to start New York; traders say the rate feels “heavy” ahead of US news. In my view, the NFP will either draw aggressive selling of USD or aggressive buying—the market is set up to either quickly extend losses or reverse completely as the technical and fundamental picture both suggest a cross-roads to end the week. Order books are thin according to some desks as yesterday cleaned out a lot of positions. If NFP is down the middle the markets might do nothing but in my view that is less likely; either the short side will have a windfall today or we will be stopped out on a reversal.


EUR/USD Daily

Resistance 3: 1.5720
Resistance 2: 1.5680
Resistance 1: 1.5620/30
Latest New York: 1.5599
Support 1: 1.5500
Support 2: 1.5440/50
Support 3: 1.5390/1.5400

Comments
Rate doesn’t do much overnight; strong bids reported on dips but offers absorb suggesting a lot of “picking sides” is going on. Trichet hints at a rate hike for July; sentiment changes rapidly and a rally today will cement that view I think. Testing the weekly opening range late in the day Thursday suggests the rate will advance further on Friday; look for NFP to disappoint and add another leg higher. Rate initially lower on French name sales; Russians on the buy side. Recovery quickly suggests the rate is finally running out of offers. Hold longs and get ready to add on a recovery. Volumes light overnight traders say. Favor the long side on dips; upside bias still remains. The bottom is in my view, Overhead resistance appears firmer on the approach to the 1.5800/20 area which is a lot closer now that the sentiment is changing.

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

2:00am EUR German Trade Balance 16.7B
4:30am EUR Sentix Investor Confidence


USD/JPY Daily

Resistance 3: 107.00
Resistance 2: 106.80
Resistance 1: 106.40/50
Latest New York: 106.25
Support 1: 105.50/60
Support 2: 105.10/20
Support 3: 104.80

Comments
Rate firms overnight but that is likely just drift; everybody waiting on NFP this morning. Offers by exporters said to be ready at the 106.30 area layered to 106.50 with option barrier at 106.50 also so the upside may be limited. Likely this rally is done near-term but the jury is out on how much a pullback will be bought; so far light bids are supporting. Stops are said to be under the 105.50 area. Expect more selling on overnight strength. Longs likely rolling stops up underneath close-in so expect volatility after NFP shortly. Look for the news to scare out the longs by active selling to end the week.

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

1:00am JPY Leading Index m/m 18.2%
3:00am JPY Economy Watchers Current Index
7:50pm JPY Core Machinery Orders m/m -8.3%


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.

Daily Forex Trading Analysis

Overnight Asia/Europe

• USD mixed on follow-through
• Model accounts buying USD/JPY
• More losses expected later in the week

Today’s Economic Reports
All times EASTERN (-5 GMT)
• 10:00am USD Pending Home Sales m/m -1.0%

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 8:30am USD Trade Balance -58.2B
• 10:00am USD IBD/TIPP Economic Optimism

Summary
The USD is mixed to start New York this morning after trading two-way overnight. A minor holiday in Asia kept volumes light but the USD remained under pressure from Friday’s close. Importers were seen buying USD/JPY as concerns about higher commodity prices for raw materials, especially crude oil, kept manufacturers nervous to start the week. Model account demand was also seen and the USD/JPY traded to a high at 105.87 through European trade before settling back a bit as crude prices fell into late morning in Europe. Cross-spreading for Yen from Sterling and EURO helped support the USD a bit as well but traders note that the USD/JPY continues to trade higher despite weakness against other pairs and are cautious about shorts. EURO rallied on follow-through from Friday for a high print at 1.5845 but failed to take out a reported option barrier at 1.5850; traders expect the upside to be challenged through the 1.60 handle and advise buying dips. Higher-than-expected UK inflation data helped to fuel a rise in the GBP overnight; all measures of the data continued to point to high inflation y/y. High prints in the GBP were at 1.9796 and again cross-spreaders for Sterling-Yen helped to support the move. Swissy met the downside objective for the first break lower at the 1.0150 area; low print at 1.0147 before some profit taking by the shorts was seen. Forex traders note that the USD/CHF has made a technical breakdown on the daily charts and despite lower Gold prices than the last time USD was at this level more losses are expected. In my view, the two-way action seen overnight with the downside bias into technical objectives indicates that the Greenback is beginning to settle down from the panic seen late last week. I expect that pullbacks/rallies in the USD will be offered at previous technical levels and as long as the sentiment remains for a weaker US economy through the third quarter of 2008 I think we can expect to see the USD continue lower and test for 2008 lows. Last week’s sharp break is telling us something and we need to go with it. Look for the next rally in USD as a selling opportunity. Those who held the EURO longs into the objective should be flat now after having sold 1.5800 even. Look for more longs in EURO this week.


EUR/USD Daily

Resistance 3: 1.5900
Resistance 2: 1.5880
Resistance 1: 1.5850
Latest New York: 1.5789
Support 1: 1.5750/60
Support 2: 1.5720
Support 3: 1.5650/60

Comments
Stops and offers noted above the 1.5790/1.5800 areas, COT data showed an increase in EURO shorts through last week and those are likely cleared now. Liquidate longs into the 1.5800 handle—if you set a limit order and let it work over the weekend you were filled this morning. Trichet hints at a rate hike for July; sentiment changes rapidly and the rally last week has cemented that view I think. Overhead resistance appears firmer on the approach to the 1.5800/20 area which is a likely to offer upside resistance through Monday.

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

2:45am EUR French Industrial Production m/m -0.8%
4:00am EUR Italian Industrial Production m/m -0.2%


USD/CHF Daily

Resistance 3: 1.0350
Resistance 2: 1.0300/10
Resistance 1: 1.0250/60
Latest New York: 1.0193
Support 1: 1.0180
Support 2: 1.0150
Support 3: 1.0110/20

Comments
“Doji” action early suggests the rate to finding bids; no doubt some are profit-taking from the shorts. Large stops elected under the 1.0350 area early in the break Friday; active selling found waves of stops suggesting the late longs got clipped hard. Rate closing under the 100 and 50 bar MA suggests more downside is coming—like a test of the monthly lows. Any rally likely to attract selling so be ready for a short. In my view, the rate needs to be sold on any strength.

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


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.

Daily Forex Trading Analysis

Today’s US Dollar Trading
• USD two-way is moderate trade
• Majors correct into support but hold firm
• US data surprises to the upside

Overnight Preview
• Look for the USD to trade two-way
• Not a lot of news until later in the week

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 8:30am USD Trade Balance -58.2B
• 10:00am USD IBD/TIPP Economic Optimism

Summary
The Greenback is mixed to end New York after a whippy start to the week. Initially weaker in Asia, the minor holiday along the Pacific Rim slowed action until the start of European trade. The USD gained a bit on the EURO and GBP as UK data was mildly supportive for Cable but was ignored as the New York session got underway. The release of US housing data was above expectations and the USD rallied into the middle of the day; however technical levels held firm and the USD’s recovery from the thrashing it got Friday is likely to be brief. Both ECB Trichet and US Tres. Sec. Paulson were speaking today and hinted that the USD strength was welcome but Trichet was less than enthusiastic about the USD’s potential to recover. He said that he welcomed the advances seen in recent weeks but warned that the oil shock seen on both continents was the result of “poor policies”; Paulson also said that intervention by the US Fed “can’t be ruled out”. In my view I think that Mr. Paulson takes the trading community for fools because anyone with any experience at all knows that it is impossible for intervention to accomplish anything of lasting value; the Forex trading community only sees that as an opportunity to add to winning positions. I suppose if the Treasury and the Fed wish to repeat the mistakes of the BOE then we should look to that as an opportunity. For the record, the GBP reversed from the highs at 1.9804 to close around the 1.9720 area leaving a strong selling wick on the day. EURO had more than a 200 point range today and closed lower but did hold the 50 bar MA in moderate trade. Most desks are expecting the EURO to again rally this week as the fundamentals are surely supporting a higher EURO. USD/JPY rallied but traders feel this is more in line with Yen weakness rather than USD strength. The rate held the weekly highs from last week and for all intents and purposes the rate is topping at the weekly highs as volumes were light on the move. Look to sell this USD strength the next 24-48 hours. No rush as the majors have a lot of give and take likely to develop near-term; US data is thin this week and may not be a factor.


EUR/USD Daily

Resistance 3: 1.5900
Resistance 2: 1.5880
Resistance 1: 1.5850
Latest New York: 1.5721
Support 1: 1.5710/20
Support 2: 1.5680
Support 3: 1.5650/60

Comments
Disappointing day for the bulls; close under the 50 bar argues for return to bearish action. Stops and offers noted above the 1.5790/1.5800 areas, COT data showed an increase in EURO shorts through last week and those are likely cleared now; fall back today tests the 50 bar MA; close below likely signals a further decline. Trichet hints at a rate hike for July but today’s rhetoric a bit softer; I think that is only to stem a rapid rise too quickly. Overhead resistance appears firmer on the approach to the 1.5800/20 area which is a likely to offer upside resistance through the rest of the week. Now that the break is out of the way we will look for a place to re-enter our longs.

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

2:45am EUR French Industrial Production m/m -0.8%
4:00am EUR Italian Industrial Production m/m -0.2%


USD/CHF Daily

Resistance 3: 1.0380
Resistance 2: 1.0350
Resistance 1: 1.0300/10
Latest New York: 1.0291
Support 1: 1.0150
Support 2: 1.0110/20
Support 3: 1.00080

Comments
Rate rallies to test the 50 bar MA where the stops were on Friday—fails to back a break higher stick suggesting the rate will rotate lower the next 24 hours. No doubt some bids are profit-taking from the shorts but that won’t last in my view. Any rally likely to attract selling so be ready for a short; sell signal today suggests rate is ready to rotate lower again. In my view, the rate needs to be sold on any strength. Look for a sell signal again overnight. Light volumes suggest whipsaw coming.

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


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.

Below you may find a Forex Trading daily Analysis

Today’s US Dollar Trading
• USD continues to advance but volumes slow
• Traders report thin order books
• US data today benign

Overnight Preview
• Look for two-way trade
• USD to consolidate

Looking Ahead
All times EASTERN (-5 GMT)
• 10:35am USD Crude Oil Inventories -4.8M
• 11:30am USD FOMC Member Kohn Speaks
• 12:15pm USD Fed Governor Kroszner Speaks
• 2:00pm USD Beige Book

Summary
The USD continued to advance against the majors today as benign Balance of Trade data was ignored in favor of rhetoric from major sources. Overnight comments by US Fed chair Bernanke suggested that the US fed was ready to raise rates sooner-rather-than-later to combat inflation; traders took this to mean the Fed could move as early as the next month or two and bought USD across the board. Tripping stops placed close-in; all the major pairs dropped dramatically against the Greenback putting the USD into strong S/R to end the day. Profit taking by the shorts also helped propel the USD higher and for the most part the USD is holding strong gains on light volume. In my view, it is the volume issue that makes this rally a concern for me. Light volume rallies are almost always followed by a retracement and I think USD bulls need to be ready for a break lower. Supporting the USD also today were lower crude prices but as I have said before, I don’t see the overwhelming economic impact of oil at $128/BBL saving the economy as opposed to $136/BBL; the fact is energy costs TWICE what it did a year ago so where is the benefit to the USD? For the record, GBP fell back assisted by cross-spreaders from the highs at 1.9760 with low prints under previous support at 1.9517. The important issue with Cable in my view is that despite the grind lower in EURO all day posting low after low; GBP did not fall in tandem suggesting that perhaps the GBP is on near-term lows. EURO reversed from highs at 1.5655 to post lows late in the day at 1.5439 before drawing bids. Forex traders say the EURO saw bids all the way down and volumes were light. In my view, the EURO is bottoming again from the exact area it started from last week. Aggressive traders can buy EURO if not holding longs already. Swissy rallied along with USD/JPY and both pairs posted near-term highs; USD/JPY at 107.46 and Swissy at 1.0441. Both rates struggled to the highs and volumes were thin; traders say order boards were empty into the highs. Offers in both pairs said to extend a reasonable 50 pips higher and the upside may be exhausting itself. A surprise move by the Bank of Canada reversed the Loonie against the Greenback; falling back under the 1.0200 handle for a low print at 1.0194 before staging a slight recovery. Traders note the USD/CAD will have a hard time extending gains after the news. Look for the USD to remain two-way and quiet overnight. Technical trade may develop in which case a drop in the USD is more likely.


EURO/USD Daily

Resistance 3: 1.5900
Resistance 2: 1.5880
Resistance 1: 1.5850
Latest New York: 1.5460
Support 1: 1.5480/90
Support 2: 1.5440/50
Support 3: 1.5390/5400

Comments
Rate grinds lower all day as order boards thin out and sovereign bids are absorbed. Support under the 1.5440 area appears solid but no bounce on thin volumes. OK to hold longs for a return to the 1.5800 area this week. Stops and bids noted at the 1.5580 area. Trichet hints at a rate hike for July but today’s rhetoric a bit softer; I think that is only to stem a rapid rise too quickly. Overhead resistance appears firmer on the approach to the 1.5800/20 area which is a likely to offer upside resistance through the rest of the week. Now that the break is out of the way we will re-enter our longs. Look for inside range day closing higher tomorrow.

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

2:45am EUR French CPI m/m 0.4%


USD/JPY Daily

Resistance 3: 108.20
Resistance 2: 107.80
Resistance 1: 107.40/50
Latest New York: 107.30
Support 1: 106.20/30
Support 2: 105.80
Support 3: 105.40/50

Comments
Rate grinds higher after the London fix, traders report thin conditions. Technical traders note a fib defense area around today’s highs and never forget that the fundamentals haven’t changed one bit in the last 72 hours; USD likely not this strong but more benefiting from Yen weakness. Still showing signs of a top, offers by exporters all the way to the overnight high traders say suggesting that the strength may be short-lived. Stops likely rolled up under the 106.20 area again for today so if a break happens—look for a drop to new monthly lows fairly quickly. Aggressive traders can sell anytime over the 107.00 area but I want to wait through the Tokyo open tonight.

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


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.

Today's Forex Trading Analysis

Today’s US Dollar Trading
• USD fails to hold gains
• Stops run early
• Two-way action suggests offers building

Overnight Preview
• Look for consolidation with a downside bias
• USD likely to open lower in New York tomorrow

Looking Ahead to Thursday
All times EASTERN (-5 GMT)
• 8:30am USD Core Retail Sales m/m 0.7%
• 8:30am USD Retail Sales m/m 0.5%
• 8:30am USD Import Price Index m/m 2.5%
• 8:30am USD Unemployment Claims 370K
• 10:00am USD Business Inventories m/m 0.3%
• 10:35am USD Natural Gas Storage
• 11:30am USD Fed Chairman Bernanke Speaks

Summary
The USD was unable to hold gains earned yesterday as the Majors rallied across the board leaving the USD bulls with losses today. Although the rally by the GBP was muted compared to the rally seen in EURO traders remind that the week is not over yet and that the US data due the next 48 hours could easily be seen as unfriendly to the Greenback. GBP was unable to test highs made in Europe overnight as spillover strength from EURO supported the rate despite offers layered above the 1.9620 area. High prints at 1.9670 were offered by cross-spreaders and the rate held the 1.9620 area into the close. EURO made a new high in New York at 1.5588 before offers capped the move but the rate continued to firm all day and managed a close at the 1.5565 area suggesting that the EURO has some teeth to the bounce near-term. Volatility has been large in both pairs and traders expect that to continue. Both pairs may cover a lot of the same ground twice the next few days but at least in EUR I expect a firm close back over the 1.5600 handle to close the week. The ECB is set to hike rates and will continue to do so for the next few quarters and I don’t see the EURO falling back any more than a reasonable correction—which may have already happened with the trade action seen since February this year. USD/JPY is lower and failed to hold the 107.00 handle on the day; low prints at 106.55 were bought as rumors of official demand were seen but the rate closes lower on the day and more losses are coming in my view. Swissy is also under pressure and low prints in New York at 1.0307 are decidedly below stops seen at the 1.0350 area earlier in the day. Forex trader’s note that in all pairs light stops were elected as the USD lost ground but the larger stops are still working; look for more USD pressure near-term as technical trading dominates ahead of US data tomorrow and Friday. Look for book-squaring tonight ahead of Retail Sales data; not normally a market-mover but with unemployment on the hook tomorrow there is a chance of aggressive action by the USD bears if they like the data.


USD/JPY Daily

Resistance 3: 108.20
Resistance 2: 107.80
Resistance 1: 107.40/50
Latest New York: 107.02
Support 1: 106.40/50
Support 2: 106.20/30
Support 3: 105.80

Comments
Rate grinds higher after breaking into support today; traders note model and momentum accounts buying USD Monday and Tuesday—good sign a top is forming. Traders report thinner conditions. Technical traders note a fib defense area around today’s highs and never forget that the fundamentals haven’t changed one bit in the last 72 hours; USD likely not this strong but more benefiting from Yen weakness. Still showing signs of a top, offers by exporters all the way to the overnight high at 107.77 traders say suggesting that the strength may be short-lived. Stops likely rolled up under the 106.80 area again for today so if a break happens—look for a drop to new monthly lows fairly quickly. Aggressive traders can sell anytime over the 107.00 area. Close over the 107.00 area a caution to the bears.

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

Tentative JPY Overnight Call Rate


USD/CHF Daily

Resistance 3: 1.0520
Resistance 2: 1.0480
Resistance 1: 1.0440/50
Latest New York: 1.0321
Support 1: 1.0300/10
Support 2: 1.0250/60
Support 3: 1.0220

Comments
Rate continues to rotate up to and fail at the 100 bar MA area; the 1.0480 area looks to be poised to offer resistance again. Today’s close under the 1.0350 area suggests further losses to end 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. Any rally likely to attract selling so be ready for a short; if we get a sell signal on the day today likely to enter a short. In my view, the rate needs to be sold on any strength. Look for a sell signal again overnight. Light volumes suggest whipsaw coming.

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

6:00am CHF SNB Board Member Jordan Speaks


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.