Daily Forex Analysis

Today’s USD Trading
USD ends mixed
GBP falls through support

Today’s Economic Reports
Consumer Confidence out at 62.3

Looking Ahead
All times EASTERN (-5 GMT)

8:15am USD ADP Nonfarm Employment Change -60K 8K
8:30am USD Advance GDP q/q 0.2% 0.6%
10:45am USD Chicago PMI 47.5 48.2
2:15pm USD FOMC Statement
2:15pm USD Federal Funds Rate 2.00% 2.25%

USD mixed, GBP and EURO fall through support
Actually a very unexpected day for the GBP and the EURO as the USD ends a mixed session sharply higher against the Europeans and mixed against everyone else. BOE Blanchflower was making dovish remarks this afternoon and the GBP extended losses from the London fix to make lows under the 1.9700 handle later in the day; the lack of volume from the Far East today likely contributed to the run on the stops as bids were simply not there. A new weekly low and a press for bids under the 1,9680 area left a low print at 1.9665; good enough to wreck a few balance sheets. EURO pressed into stops as well as the potential for correction continues; low prints at 1.5539 in early US trade were untouched for the end of the day and EURO rallied on dip buying but not enough to discourage the bears. Low prints under the 1.5520 area expected tomorrow after the FOMC meeting I think. Other pairs remained fairly range-bound; no real action either way with the exception of USD/JPY.
Many forex traders get so absorbed in trying to find the “best” entry point that they completely lose focus on the really important things.The most significant thing to always remember is that price action needs to be exploited from the point of view that you need to buy low and sell high in order to profit.It doesn’t matter if you are shorting the market or going long—you ALWAYS must have a buy execution lower than your sell. Anything else is a loss. Therefore, you must always be selling strength; whether or not you are covering a long or going short. Same for the other way around. It doesn’t matter if you are covering a short or going long; you must buy weakness. In the final analysis, your trading results are determined by your willingness to buy when everyone else is selling…and buy when everyone else is selling. Don’t look for the perfect place to enter. Rather look for a buy zone after a break and vice-versa.
Actually a very unexpected day for the GBP and the EURO as the USD ends a mixed session sharply higher against the Europeans and mixed against everyone else. BOE Blanchflower was making dovish remarks this afternoon and the GBP extended losses from the London fix to make lows under the 1.9700 handle later in the day; the lack of volume from the Far East today likely contributed to the run on the stops as bids were simply not there. A new weekly low and a press for bids under the 1,9680 area left a low print at 1.9665; good enough to wreck a few balance sheets. EURO pressed into stops as well as the potential for correction continues; low prints at 1.5539 in early US trade were untouched for the end of the day and EURO rallied on dip buying but not enough to discourage the bears. Low prints under the 1.5520 area expected tomorrow after the FOMC meeting I think. Other pairs remained fairly range-bound; no real action either way with the exception of USD/JPY. The rate found stops under the 103.50 area for a low print at the 103.21 number before rallying hard to re-gain the 104.00 handle; sympathy buys along with equities as well as cross-spreading likely lifted the pair. Looking ahead to US data tomorrow you can expect a volatile day in my view. First up is ADP private payrolls which have added a lot of two-way action. Next is GDP and last is FOMC—all things considered tomorrow is the day to set the tone for the rest of the week. Look for the Greenback to be quiet overnight.

GBP/USD Daily

Resistance 3: 1.9820
Resistance 2: 1.9750
Resistance 1: 1.9720/30
Latest New York: 1.9683
Support 1: 1.9650/60
Support 2: 1.9600
Support 3: 1.9550

Other Things to Watch/Open Trades/News

Currently flat—stopped out of short yesterday.

Rate has strong buy signal but top is at
resistance; possible “late” conflicting signal.

Rate under 1.9720 area important, major stops likely under the 1.9600 handle; likely to be challenged soon but given conditions a bounce is coming first.
Closing under the 1.9600 the next 24
hours likely set the stage for a return to 2008 lows near-term.
Upside is limited in my view but ranges can be wide as evidenced by the past few
days of trade. Sell rallies if not short; buying dips dangerous in my view.
Drop to under the MA’s very important in my view. Long selling wick makes sell
side attractive for further losses. Need down bars with higher volume to confirm
Overnight data unfriendly with more to come, Some pressure from EURO also.

Data due Wednesday All times EASTERN (-5 GMT)

Tentative GBP Nationwide House Prices m/m -0.5% -0.6%

EURO/USD Daily

Resistance 3: 1.5680
Resistance 2: 1.5650/60
Resistance 1: 1.5600/10
Latest New York: 1.5565
Support 1: 1.5630/40
Support 2: 1.5600/10
Support 3: 1.5480

Other Things to Watch/Open Trades/News

4-22-08 SHORT EURO/USD 1.6000 Stops @ 1.6100
4-24-08 SHORT EURO/USD 1.5650 Stops @ 1.5750

Look to add to shorts again soon.

Comments
Market has failed at 1.6000 area resistance with confidence now, be patient on the
potential break. Overhead resistance is heavy above the 1.5750 area; traders say
offers extend into the 1.5800/30 area with stops above. Two-way trade at resistance to start on Monday suggests a deeper pullback is in the works. Strong long-liquidation break is still coming; look for a test of the lows again within 24 hours. Watch for two-way volatility. Be ready to add quickly if a rally happens.

Data due Wednesday All times EASTERN (-5 GMT) Forecast Last

3:55am EUR German Unemployment Rate 7.8% 7.8%
5:00am EUR CPI Flash Estimate y/y 3.4% 3.5%
5:00am EUR Consumer Confidence -13 -12

USD/JPY Daily

Resistance 3: 105.00
Resistance 2: 104.80
Resistance 1: 104.20/30
Latest New York: 104.00
Support 1: 103.50/60
Support 2: 103.20/30
Support 3: 103.00

Other Things to Watch/Open Trades/News

Still Flat but aggressive traders can sell on a test
of the 105.00 area;

Looking at the sell side early this week.

USD/CHF Daily

Resistance 3: 1.0450
Resistance 2: 1.0420
Resistance 1: 1.0380
Latest New York: 1.0373
Support 1: 1.0320/30
Support 2: 1.0300
Support 3: 1.0270/80

Other Things to Watch/Open Trades/News

SHORT USD/CHF 1.0380 Stops @ 1.0480

Aggressive traders can sell 103.70/80 area and
hold over the weekend (Higher risk so trade accordingly)

Comments
Rate clears stops above near-term resistance. Rate now at very top of range; look for
a sell-off from here but news is needed. Pullback was bought after the fix on Friday
and the rate is firm now for a test of the 104.30/40 area again.
Test of the lower range now expected if rate can fail again at resistance.
Expect a bounce from 1.0250 now so be nimble though as a break below there likely
to draw aggressive selling. Rate has set up to attract dip buying so we need to see if
that is a head-fake. Need a failure at 1.0420 near-term to go short in my view.
No follow-through is to be respected; look for offers to show up higher than the1.0400
handle now that the bounce followed through higher.

Data due Wednesday All times EASTERN (-5 GMT)

5:30am CHF Leading Index m/m 1.46 1.54

USD/CAD Daily

Resistance 3: 1.0220
Resistance 2: 1.0180
Resistance 1: 1.0130
Latest New York: 1.0109
Support 1: 1.0100
Support 2: 1.0080
Support 3: 1.0050

Other Things to Watch/Open Trades/News

SHORT USD/CAD 1.0130 Stops @ 1.0230

Failure to close above the 101.80 area suggests
the rate has a failed rally (top of range).

ON THE LOWS TO END NEW YORK

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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 Analysis

Today’s USD Trading

• USD quiet in Asia, firms in Europe
• GBP and EURO rally after rate cut
• Whipsaw in the majors

Today’s Economic Reports
All times EASTERN (-5 GMT)
• 8:15am ADP Private Payrolls, Actual+ 10,000
• 8:30am Advance GDP q/q 0.2%0.6%, Actual +0.6, -0.2%
• 8:30am Advance GDP Price Index q/q 3.0%2.6%
• 8:30am DECI q/q 0.8%0.8%
• 9:45am Chicago PMI 47.548.2 Actual 48.3
• 2:15pm FOMC, actual 25 BP cut

Looking Ahead to Thursday
All times EASTERN (-5 GMT)
• 7:30am Challenger Job Cuts y/y 9.4%
• 8:30am Personal Spending m/m 0.2%0.1%
• 8:30am Core PCE Price Index m/m 0.1%0.1%
• 8:30am Unemployment Claims 363K342K
• 8:30am Personal Income m/m 0.4%0.5%
• 10:00am ISM Manufacturing Index 48.048.6
• 10:00am ISM Manufacturing Prices 83.583.5
• 10:00am Construction Spending m/m -0.8%-0.3%

USD two-way again, GBP rallies back, Fed cuts

As expected the FOMC cut interest rates 25 BP today and changed the wording of the statement suggesting that the Fed is taking a more neutral course in the coming months. Analysts are debating that the Fed would like to see the effect of both the new liquidity windows and the government rebate-stimulus package before weighing in on further rate cuts. The Fed made clear that it is still considering the inflation pressures seen recently and the bottom line to the rate cut is a “wait and see” attitude. In response the USD whipsawed trader’s on the news; initially rising against some pairs and then getting slammed later. Forex Traders note that the rally in GBP as well as EURO are “knee jerk” responses to trade volatility and don’t expect a serious change in trend; most agree the USD “squeezed” weak longs initially. For the record, the GBP rallied on news starting this morning as other US news was not USD friendly but popped higher on stops and short-covering above the 1.9800 handle for a high print at 1.9897 before finding offers at technical resistance around the recent developing down trend. Traders note that cable has been exceptionally volatile the past several weeks and today was no exception; if the rate follows suit the next 24 hours we should see a return to the 1.9600 handle by the end of the week. EURO rallied initially on the news for a high print at 1.5645 and looks set to continue higher but offers in the 1.5650 area and 1.5680 area are said to be getting thicker so this rally off the lows may be a dead-cat bounce. Look for a lack of follow-through overnight. USD/JPY broke under the 104.00 handle in heavy trade for a low print at the 103.68 number at last look; traders note that the rate has had good selling from CTA types and exporters around the 104.60/80 area this morning. USD/CAD and Swissy also taking their lumps but not nearly as aggressively as other pairs; OK to hold open shorts across the board and let the overnight action work for us. Tomorrow is a light day for news so expect a rotation in the USD; especially against GBP.

GBP/USD

Resistance 3: 1.9950
Resistance 2: 1.9900/10
Resistance 1: 1.9820/30
Latest New York: 1.9883
Support 1: 1.9820/30
Support 2: 1.9780
Support 3: 1.9750

Other Things to Watch/Open Trades/News

4-30-08 SELL GBP/USD 1.9820 OB Stops@ 1.9920
(Should be short from this afternoon)

Whipsaw still evident, selling into the top of the trend line and volatility.

Comments
Rate under 1.9720 area important but rally back clears weak shorts. major stops likely under the 1.9600 handle; likely to be challenged soon but given conditions a bounce is coming first (which happened after FOMC) Upside remains limited in my view but ranges can be wide as evidenced by the past few days of trade. Sell rallies if not short; buying dips dangerous in my view.
Drop to under the MA’s very important, long selling wick makes sell side attractive for further losses. Need down bars with higher volume to confirm.
Overnight data unfriendly with more to come, Some pressure from EURO also.
Rate attracting bids from momentum players so look for stops close-in overnight.

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

2:00am GBP Nationwide House Prices m/m -0.5%-0.6%

EUR/USD

Resistance 3: 1.5700/10
Resistance 2: 1.5680
Resistance 1: 1.5650
Latest New York: 1.5615
Support 1: 1.5580
Support 2: 1.5540/50
Support 3: 1.5520

Other Things to Watch/Open Trades/News

4-22-08 SHORT EURO/USD 1.6000 Stops @ 1.5750
4-24-08 SHORT EURO/USD 1.5650 Stops @ 1.5750

ROLL Stops to 1.5750 on entire position; look to add to shorts again later today.

Close under the 1.5550 area sets up a test of stops.

Comments
Market has failed at 1.6000 area resistance with confidence now, be patient on the potential break. Overhead resistance is heavy above the 1.5750 area now with 1.5660 first; traders say offers extend into the 1.5800/30 area with stops above. Two-way trade at resistance to start on Monday suggests a deeper pullback is in the works. Strong long-liquidation break is still coming; test of the lows as expected Wednesday. Watch for two-way volatility. Be ready to add quickly if a rally happens; rate has BIG stops under the 1.5520 area and a break under the 50 bar MA could be swift. Rally after FOMC is a “head fake”; look for retreat within 24 hours.

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

All Day EUR Holiday: Labour Day

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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 Analysis

Today’s USD Trading

• USD weakens in Asia, goes two-way in Europe
• Asia and Europe minor holidays, volumes light
• USD rallies hard in NY trade, US data neutral

Overnight Preview

• Expect a book-squaring session
• Not a lot left to drive the greenback

Looking Ahead
All times EASTERN (-5 GMT)
• 8:30am Nonfarm Employment forecast -80K
• 8:30am Unemployment Rate forecast 5.2%
• 8:30am Average Hourly Earnings m/m forecast 0.3%
• 10:00am Factory Orders m/m forecast 0.2%

Summary
The USD roared back today from a disappointing set of data this morning and recovered a lot of lost ground against most of the pairs. USD/CHF rallied the most hitting stops said to be resting above the 104.50/60 area for a high print at 1.0511 before falling back a bit. Traders note that today’s slew of minor US data had no real market moving information to it but a general tone of USD recovery helped underpin the Greenback for most of the day; higher equities also underpinned along with cheaper oil. GBP fell back from a European high print at 1.9912 to find the usual volatility seen of late; lows after the London fix at 1.9710 again making for huge whipsaw. Traders who are holding GBP shorts can rest easy overnight as the rate is trading under the 100 bar MA today and as long as it remains under the “sell zone” at 1.9750 area a test of the 1.9600 handle is likely. EURO also had a down day falling through several layers of stops; traders note that the big stops rumored to be at 1.5520 area actually were a bit lower at 1.5480/90 area and the rate accelerated for a low print in NY at 1.5429. Traders now believe the EURO is headed under the 1.5400 handle for a test of the first fib defense around the 1.5350 area; in my view the next rally needs to be sold aggressively as the lead we have on the trade is getting quite large. Aggressive traders can roll stops down to the 1.5650 area also. USD/JPY was trading under the 104.20 area most of the day until equities rallied above gains of 125 points and then broke out for a try at heavy offers at 104.80 area; high prints shy of there at 104.60 and the offers were thick traders say. Aggressive traders holding shorts can look to add on a close under the lows today at 103.53. USD/CAD rallied along with Swissy and scored the 1.0200 handle for a high print at 1.0240 before dropping back to close under the 1.0180 area. I hate getting stopped out but the numbers are still valid for holding shorts in my view; we will look for that tomorrow. All in all today’s as-expected ISM fell to the back seat as USD one-way volatility took everyone by surprise; look for a bout of book-squaring overnight and a lower end to the week after NFP tomorrow; NFP likely to come in on the low side so expect whipsaw in the AM.

GBP/USD

Resistance 3: 1.9850/60
Resistance 2: 1.9820/30
Resistance 1: 1.9780
Latest New York: 1.9740
Support 1: 1.9700/10
Support 2: 1.9650
Support 3: 1.9600/10

Comments
Rally back from “sell zone 1.9730/50 area” clears weak shorts. major stops likely under the 1.9600 handle; above 1.9900 rejected soundly; fall back to the “sell zone” at 1.9720/50 significant. Close under the 1.9700 handle again needed to wash out the longs. Upside remains limited in my view but ranges can be wide as evidenced by the past few days of trade. Sell rallies if not short; buying dips dangerous. Drop to under the MA’s very important, long selling wick makes sell side attractive for further losses. Need down bars with higher volume to confirm. Overnight data unfriendly with more to come, Some pressure from EURO also. Cross-spreading for Yen, Swissy and EURO evident; look for additional sell-off to end the week.

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

4:30am Construction PMI forecast 47.0

EUR/USD

Resistance 3: 1.5700/10
Resistance 2: 1.5680
Resistance 1: 1.5650
Latest New York: 1.5615
Support 1: 1.5590/1.5600
Support 2: 1.5540/50
Support 3: 1.5520

Comments
Rate clears stops and attracts aggressive selling after 1.5490 area falls; drop to 1.5420 area likely to draw a bounce but upside likely limited to 1.5520/30 area. Look to sell a bounce. Two-way trade at resistance Thursday in Europe (1.5650 area) suggests rate has limited upside. Deeper pullback still in the works. Strong long-liquidation break is still coming; test of the lows as expected by end of the week. Watch for two-way volatility. Be ready to add quickly if a rally happens; close under the 50 bar MA could attract active selling.

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

4:00am Manufacturing PMI (r) forecast 50.8

In association with Forex Trading Edge

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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.

Forex Trading Daily Analysis

Overnight Asia/Europe

• USD very quiet
• Holidays in Asia and UK

Today’s Economic Reports
All times EASTERN (-5 GMT)
• 10:00am USD ISM Non-Manufacturing Composite forecast 49.6

Looking Ahead
All times EASTERN (-5 GMT)
• None in the US , Very light start to the week; housing data Wednesday likely to carry more weight.

Summary
The USD is trading sideways to slightly lower to start New York after a very quiet overnight start to the week. Asian trade was very subdued with Japan, Korea and Thailand market centers closed; traders noted good demand for USD/JPY from a UK momentum fund as well as order driven trade in EURO. With the UK closed also for a minor holiday European trade was also on the quiet side; traders note that volumes were very light and trade remained technical in nature. For the most part the USD remained within a few pips either way of the Friday New York close; cable saw downside pressure from light selling around the 1.9720 area and more in sympathy from a weaker EURO. High prints in Cable at 1.9786 were a few pips shy of the 100 day MA suggesting that larger offers are willing to sell rallies despite the thinner conditions. Stops elected under the 1.9700 area gave GBP one more push lower ahead of the NY open for a low print at 1.9660; traders expect a slight bounce from this support area and today’s ISM services may provide the impetus. EURO is a bit better than Friday’s close but still trading two-way and respecting the 1.5500 area of current resistance. Forex Traders note no real market-moving news but mention the cross-spreaders for Yen and Sterling have been active on the Buy side overnight. EURO not expected to extend gains today and rallies are seen as a selling opportunity. USD/JPY continues to hold the 105.00 handle in light trade with the lack of follow-through buying a concern for the bulls. In my view, the fact that momentum accounts were on the buy side of USD to start the week is a great clue the rate is about to reverse; aggressive traders can sell USD/JPY over the 105.20 area if not short already. Swissy and Loonie are also slightly lower but still within established ranges from last week. Looking for a solid break in both pairs this week so any strength will likely be a selling opportunity. After ISM this morning look for the markets to have a brief “Knee-Jerk” reaction to the news and then settle back to pre-report numbers. Without real news in the US until Wednesday and the holidays overseas today should remain fairly quiet without major action.

GBP/USD Daily

Resistance 3: 1.9820
Resistance 2: 1.9780
Resistance 1: 1.9720
Latest New York: 1.9684
Support 1: 1.9650/60
Support 2: 1.9600
Support 3: 1.9550



Comments
Rate drops under the 1.9700 handle to start, look for a test of the 1.9600 area within 24 hours. Close under the 1.9700 handle again needed to wash out the longs.
Upside remains limited in my view but ranges can be wide as evidenced by the past few days of trade. Sell rallies if not short; buying dips dangerous.
Drop to under the MA’s very important, long selling wick makes sell side attractive for further losses. Need down bars with higher volume to confirm.
Some pressure from EURO remains. Cross-spreading for Yen, Swissy and EURO evident; look for additional sell-off to end the week. NFP today increased volatility and negative close is great for follow-through Monday

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

4:30am Services PMI 51.7
7:01pm Consumer Confidence Index 74



EUR/USD Daily
Resistance 3: 1.5600/10
Resistance 2: 1.5550/60
Resistance 1: 1.5500
Latest New York: 1.5453
Support 1: 1.5400/10
Support 2: 1.5350/60
Support 3: 1.5300



Comments
Additional selling to new low early, Rate clears stops again and attracts active selling after 1.5400 area falls; bounce sure to happen soon but upside likely limited to 1.5520/30 area. Look to sell a bounce during the next 48 hours. Strong long-liquidation break is still coming; test of the lows as expected. Watch for two-way volatility. Be ready to add quickly if a rally happens; close under the 50 bar MA could attract active selling.

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

4:00am Services PMI (r) 51.8
5:00am PPI m/m 0.6%

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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 Analysis

Today’s US Dollar Trading

• Major pairs two-way, end stronger
• Volumes light due to minor holidays
• USD ends near lows

Overnight Preview
• Look for more two-way and consolidation trade

Looking Ahead
All times EASTERN (-5 GMT)
• None in the US, very light start to the week; housing data Wednesday likely to carry more weight.

Summary
A very quiet two-way session left the USD slightly lower from Friday’s closing levels against the forex trading majors; traders note that the holiday thinned conditions contributed to the lack of interest either way. On the day, after what would have been the London fix, the USD fell into some active selling as the rate cleared below initial opening levels seen in Asia; traders suggesting that model and momentum accounts were liquidating late long positions when the USD saw no follow-through after the initial push higher on the day seen around the release of the ISM Services numbers this morning. Coming out a bit better than forecast the USD rallied on the news but was unable to hold gains and quickly fell back to test lows. EURO was able to clear above the 1.5500 handle for a high print in late trade at 1.5520 recovering a full handle off the 1.5422 low print; traders say there was no real reason for the move other than short-covering and that was likely exacerbated by the thin conditions. Cable initially broke to fresh lows at 1.9653 but then began a slow-steady march until reaching the opening range before popping higher on technical trade; closing above the 1.9700 handle leaves a “doji” point of indecision today suggesting the rate is poised to rotate higher near-term. If short the GBP; I would cover and re-set shorts after the rally that seems sure to happen overnight. USD/JPY tried again for the 105.60/80 area with a post-news high print at 105.63 but was again turned back; even with Japan closed today exporters were no doubt on the offer. The rate fell into support at the 105.10/20 area for most of the day before falling to pressure seen in other rates; low prints at 104.72 continue to support the 104.80 area but traders feel confident the stops seen under the 105.00 are only the early longs getting out. Traders feel bids extend to 104.50 area with large stops likely in the 104.30/40 area; look out below if those trigger this week as a technical top would form in the USD. Swissy and Loonie both lower as well with Loonie holding above the 1.0100 handle again despite good offers all the way down to the lows at 101.18; most likely stops are under the 1.0100 area. Swissy is well off the overnight highs of 1.0598 making lows in New York at 1.0509 and closing near the lows. In my view, the USD is off to a defensive start and if you are holding shorts from last week look to add on any strength; it’s my view the Greenback is headed for support by the end of the week.

GBP/USD Daily

Resistance 3: 1.9820
Resistance 2: 1.9780
Resistance 1: 1.9740/50
Latest New York: 1.9722
Support 1: 1.9650/60
Support 2: 1.9600
Support 3: 1.9550

Comments
Rate drops under the 1.9700 handle to start, look for a test of the 1.9600 area within 24 hours. Close under the 1.9700 handle again needed to wash out the longs. Bounce back to trade at or near the 1.9720 area into the close suggests a rally is coming. Upside remains limited in my view but ranges can be wide as evidenced by the past few days of trade. Sell rallies if not short; buying dips dangerous. Drop to under the MA’s very important, long selling wick makes sell side attractive for further losses. Need down bars with higher volume to confirm; not getting that today. Some pressure from EURO remains. Cross-spreading for Yen, Swissy and EURO evident; look for additional sell-off to end the week. NFP today increased volatility and negative close is great for follow-through Monday

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

4:30am Services PMI 51.7
7:01pm Consumer Confidence Index 74


EUR/USD Daily

Resistance 3: 1.5600/10
Resistance 2: 1.5550/60
Resistance 1: 1.5520
Latest New York: 1.5492
Support 1: 1.5400/10
Support 2: 1.5350/60
Support 3: 1.5300

Comments
Additional selling to new low early, Rate clears stops again and attracts active selling after 1.5400 area falls; Strong long-liquidation break is still coming; test of the lows as expected. Watch for two-way volatility. Be ready to add quickly if a rally happens; close under the 50 bar MA could attract active selling. Continue to hold shorts and look for a short-covering rally to stall around the 1.5550/1.5600 area; look to add to open shorts in that area.

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

4:00am Services PMI (r) 51.8
5:00am PPI m/m 0.6%

In association with Forex Trading Edge

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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

Today’s US Dollar Trading
• USD two sided, ends flat-to-mixed
• Reverses early weakness
• Traders waiting for tomorrow’s data

Overnight Preview
• Expect consolidation.
• USD likely to range trade on light volumes ahead of data tomorrow

Looking Ahead
All times EASTERN (-5 GMT)
• 9:00 AM CDT Pending Home Sales forecast -0.6%, Look for weak housing data.

Summary
Aside from some early fireworks on the sell side this morning the USD was relatively subdued for most of New York trade. Starting slowly in Asia overnight as the last day of Golden Week slowed the pace of early action the USD remained two-sided in technical trade until New York got underway. A “stop-fest” in the USD/CAD as early USD weakness spilled over into all the pairs; the majors all rallying into resistance with stops the other side for almost everybody creating a near-term break in the Greenback. Loonie sliding under the 1.0050 area and finding lots of action as expected, low prints at .9996 on the second attempt at par. After the lows in USD/JPY and the highs in EURO and GBP all held resistance the USD mounted a turnaround that extended a full handle higher in Swissy and back through the opening ranges in the other pairs. On the day the USD has put in a buying wick in most pairs suggesting that today’s early weakness was only weak shorts. GBP managed a high print at 1.9775 just barely above the 1.9750 pivot area before falling back to trade through the opening range at 1.9725; Cable looks set up for a rotation lower as the EURO also failed and these two are trading in sympathy together. EURO highs at 1.5596 attracted a lot of active offers once the stops were cleared traders say; the rate stays positive on the day but with a long wick at resistance. Across the board the volumes were modest as traders complained of thin conditions due to the various minor holidays this week. With no real news on the boards today the action today is most likely random noise between existing S/R levels; most agree the recent USD strength has a bit more to go before a correction so possibly today was an opportunity to get long from some recent lows. In my view, the USD closed higher than I would like to see for an extended correction and I suggest getting out of USD/JPY shorts and waiting on selling the Greenback until after the news is out tomorrow. Price action is always correct and the drop today needed to stay under pressure if the fire was out of the rally but due to the swift turnaround in thin conditions I think the USD has a bit more to go to the upside yet.

GBP/USD Daily

Resistance 3: 1.9820
Resistance 2: 1.9780
Resistance 1: 1.9740/50
Latest New York: 1.9730
Support 1: 1.9650/60
Support 2: 1.9620/30
Support 3: 1.9600

Comments
Rate stays two-way all day, closes above the 1.9700 handle, still in the “sell zone” with existing S/R still active. Look for a test of the 1.9600 area within 24 hours; likely after the news Wednesday. Close under the 1.9700 handle again needed to wash out the longs. Bounce back to trade at or near the 1.9720 area into the close suggests a rally is coming. Upside remains limited in my view but ranges can be wide as evidenced by the past few days of trade. Sell rallies if not short; buying dips dangerous. Closes over the MA’s likely not to last so a rally over the 100 bar MA a good sell in my view. Still need down bars with higher volume to confirm; not getting that today. Some pressure from EURO remains. Cross-spreading for Yen, Swissy and EURO evident; look for additional sell-off to end the week.

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

4:30am GBP Services PMI 51.7
7:01pm GBP Consumer Confidence Index 74


EUR/USD Daily

Resistance 3: 1.5650
Resistance 2: 1.5590/1.5600
Resistance 1: 1.5550/60
Latest New York: 1.5536
Support 1: 1.5450
Support 2: 1.5400
Support 3: 1.5380

Comments
Two-way action all day, weaker close after push to resistance, look for rotation lower tomorrow. Rate clears close in stops both ways again and attracts active selling above the 1.5500 handle. Strong long-liquidation break is still coming; test of the lows as expected. Watch for two-way volatility. Be ready to add quickly if a rally happens; close under the 50 bar MA could attract active selling. Continue to hold shorts and look for a short-covering rally to stall around the 1.5550/1.5600 area; look to add to open shorts in that area; missed it today unless actively watching.

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

3:30am EUR ECB President Trichet Speaks
4:00am EUR Services PMI 51.8
5:00am EUR PPI m/m 0.6%


Analysis by: Forexpros.com written by Jason Alan Jankovsky

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


Today’s US Dollar Trading

• USD firms, sideways after Housing Data
• Pending Home Sales as expected
• Speculation BOE might cut rates Thursday

Overnight Preview

• Look for book-squaring ahead of BOE meeting

Looking Ahead to Thursday
All times EASTERN (-5 GMT)
• 8:30am USD Unemployment Claims forecast 370K
• 10:00am USD Wholesale Inventories m/m forecast 0.5%
• BOE MPC Rate Announcement no change forecasted

Summary
The USD has had a strong Forex Trading day after another slow start in Asia overnight. Equities softened which kept some pressure on the USD/JPY pair but the Greenback was able to stay on the offensive against most of the pairs throughout the day. Cable broke hard on poor UK data and speculation that a rate cut is coming from the BOE MPC tomorrow; highs at 1.9740 in Asia were never challenged and once the rate broke back through the New York lows form Tuesday stops drove the rate lower until active selling added additional weight. Low prints in early New York at 1.9501 making a show for big stops said to be under the 1.9400 handle but the rate firmed and by afternoon was trading back above the 1.9530 area. USD/CAD tested lows at parity again overnight but was unable to attract additional selling. High prices for gold and oil continue to pressure the rate as the Loonie is seen gaining against the USD while oil remains on the offense. Look for that rate to test the 1.0050/60 area again overnight but to fail as this is previous support area now working as resistance. EURO fell through stops again under the 1.5500 handle overnight and made a show for the support area at 1.5350; low prints at 1.5365 attracted a bit of short-covering but the rate is still weak at the 1.5400 handle. If you are holding shorts in the EURO you have reached a technical objective from the reversal at the 1.6000 handle. It might be wise to lighten up a bit on your shorts and wait for a correction higher to add again. With the BOE meeting tomorrow any “surprises” might rally the pair back to test the 1.5500 handle easily; banking some of the gain might be advisable. In my view the USD has had a great rally to test S/R across the board but today’s data and what is to come still don’t build a case for a strengthening USD long-term. I see today’s strength as a chance to book gains on some positions; aggressive traders can get long the majors short-term if you wish.

GBP/USD Daily

Resistance 3: 1.99680
Resistance 2: 1.9620/30
Resistance 1: 1.9580
Latest New York: 1.9535
Support 1: 1.9500
Support 2: 1.9480
Support 3: 1.9450

Comments
Rate falls through 1.9650 support area and stops drive trade lower, support at 1.9500 area now in play. Bounce likely from here. Look for a re-test of the 1.9600 area within 24 hours; likely after the news Thursday from BOE; failed to rally after the fix today. Close under the 1.9700 handle today likely washed out longs; shorts will cover before the weekend. Bounce back to trade at or near the 1.9720 area by the end of the week suggests a rally is coming. Upside remains limited in my view but ranges can be wide as evidenced by the past few days of trade. Sell rallies if not short; buying dips dangerous.
Closes over the MA’s likely not to last so a rally over the 100 bar MA a good sell in my view. Some pressure from EURO remains. Cross-spreading for Yen, Swissy and EURO evident.

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

Tentative GBP MPC Rate Statement
7:00am GBP Official Bank Rate 5.00%


EUR/USD Daily

Resistance 3: 1.5580
Resistance 2: 1.5550/60
Resistance 1: 1.5500
Latest New York: 1.5432
Support 1: 1.5400/10
Support 2: 1.5380
Support 3: 1.5350

Comments
Two-way action overnight again but break under 1.5450 area on stops suggests more losses are coming; bounce likely first. Support at 1.5365 as expected and the rate rallied hard within 24 hours last time at this number. Look for rotation higher next 24 hours. Rate clears close in stops again and attracts active selling below the 1.5500 handle. Strong long-liquidation break is still coming; test of the lows as expected. Watch for two-way volatility. Be ready to add quickly if a rally happens; look for a short-covering rally to stall around the 1.5550/1.5600 area again; look to re-short in that area; missed it yesterday.

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

2:00am EUR German Trade Balance 16.9B
6:00am EUR German Industrial Production m/m -0.5%
7:45am EUR Minimum Bid Rate 4.00%

8:30am EUR ECB Press Conference

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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

Today’s US Dollar Trading
• BOE and ECB leave rates on hold, as expected
• USD reverses after starting better overnight
• Majors hold key support (?)

Overnight Preview
• Look for USD to consolidate, possible book squaring ahead of US data

Looking Ahead
All times EASTERN (-5 GMT)
• 8:30am USD Trade Balance -61.4B

Summary
The USD is sharply lower to end the Thursday US session after initially firming overnight. The absence of major news plus general sentiment RE: the weakness in the US Economy this week put a damper on the potential for the USD to rally significantly and stay there. After a follow-on break into key support the majors reversed out of the lows and actually made highs during early New York trade before settling back to general two-way action. Cable looked set to hold the 1.9600 handle but weak longs dumped positions into the London fix and the rate continued to rotate around the 1.9550 area for the rest of the day; high prints at 1.9629 and lows at 1.9500 have created a technical double-bottom. Traders look for a bout of short covering if the 1.9500 area holds on a test the next 24 hours but with the end of the week due anyway I suspect that shorts will cover ahead of the London Fix tomorrow. EURO also rallied back after a hard fall overnight; initially triggering stops on a break under the 1.5350 area. Active selling and more stops took the rate down to 1.5284 low print before rallying back to make highs on the day at 1.5442 as late shorts were forced to cover. Forex Traders note that system accounts and model accounts were active on the sell side overnight and most likely they were whipsawed adding to the upside bias for the US session. USD/JPY fell into stops as the 104.50/60 area was unable to hold the recent advance; stops under the 104.00 handle also adding to the pressure as were lower equities. Although equities were firmer in NY today the failure to hold gains was seen as a negative for the rate. Traders also note that USD/JPY has possibly broken the recent uptrend channel; stops are said to be resting under today’s low at the 103.60 area suggesting a long-liquidation break may be in the works. Loonie weakened dramatically and the USD/CAD was higher on the day against the sentiment of the market. Traders may be watching crude and gold prices for clues to the rates near-term direction but the 1.0200 handle is still offering solid resistance; highs at 1.0180 again. On the day, the USD has likely made the highs for the week against some pairs. Look for corrective action overnight as the market prepares for the last piece of news for the week; US balance of Trade Friday morning.

GBP/USD Daily

Resistance 3: 1.9680
Resistance 2: 1.9650
Resistance 1: 1.9620/30
Latest New York: 1.9526
Support 1: 1.9500
Support 2: 1.9480
Support 3: 1.9450

Comments
Rate falls through 1.9650 support area and stops drive trade lower, support at 1.9500 area now in play. Bounce likely from here. Look for continuation of the recovery Friday. Look for a re-test of the 1.9600 area within 24 hours; likely ahead of the London Fix Friday. Close under the 1.9700 handle today likely washed out longs; shorts will cover before the weekend. Bounce back to trade at or near the 1.9720 area by the end of the week suggests a rally is coming. Upside remains limited in my view but ranges can be wide as evidenced by the past few days of trade. Sell rallies if not short; buying dips dangerous. Closes over the MA’s likely not to last so a rally over the 100 bar MA a good sell in my view. Some pressure from EURO remains. Cross-spreading for Yen, Swissy and EURO evident.

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



EUR/USD Daily

Resistance 3: 1.5500/10
Resistance 2: 1.5480
Resistance 1: 1.5450
Latest New York: 1.5400
Support 1: 1.5380
Support 2: 1.5350
Support 3: 1.5300/10

Comments
Sharp follow-on break is sold by system accounts; likely a bounce is coming. Rally over the 1.5400 handle significant. Rate holds opening range on the fall-back; solid sign of no sellers left. Break under 1.5300 area on stops suggests more losses are coming; bounce likely first. Support at 1.5280 is firm near-term. Look for rotation higher next 24 hours. Rate clears close in stops again. Strong long-liquidation break is still coming; Watch for two-way volatility. Be ready to re-short quickly if a rally happens; look for a short-covering rally to stall around the 1.5550/1.5600 area again; look to re-short in that area.

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

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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

Today’s US Dollar Trading
• BOE and ECB leave rates on hold, as expected
• USD reverses after starting better overnight
• Majors hold key support (?)

Overnight Preview
• Look for USD to consolidate, possible book squaring ahead of US data

Looking Ahead
All times EASTERN (-5 GMT)
• 8:30am USD Trade Balance -61.4B

Summary
The USD is sharply lower to end the Thursday US session after initially firming overnight. The absence of major news plus general sentiment RE: the weakness in the US Economy this week put a damper on the potential for the USD to rally significantly and stay there. After a follow-on break into key support the majors reversed out of the lows and actually made highs during early New York trade before settling back to general two-way action. Cable looked set to hold the 1.9600 handle but weak longs dumped positions into the London fix and the rate continued to rotate around the 1.9550 area for the rest of the day; high prints at 1.9629 and lows at 1.9500 have created a technical double-bottom. Traders look for a bout of short covering if the 1.9500 area holds on a test the next 24 hours but with the end of the week due anyway I suspect that shorts will cover ahead of the London Fix tomorrow. EURO also rallied back after a hard fall overnight; initially triggering stops on a break under the 1.5350 area. Active selling and more stops took the rate down to 1.5284 low print before rallying back to make highs on the day at 1.5442 as late shorts were forced to cover. Traders note that system accounts and model accounts were active on the sell side overnight and most likely they were whipsawed adding to the upside bias for the US session. USD/JPY fell into stops as the 104.50/60 area was unable to hold the recent advance; stops under the 104.00 handle also adding to the pressure as were lower equities. Although equities were firmer in NY today the failure to hold gains was seen as a negative for the rate. Traders also note that USD/JPY has possibly broken the recent uptrend channel; stops are said to be resting under today’s low at the 103.60 area suggesting a long-liquidation break may be in the works. Loonie weakened dramatically and the USD/CAD was higher on the day against the sentiment of the market. Traders may be watching crude and gold prices for clues to the rates near-term direction but the 1.0200 handle is still offering solid resistance; highs at 1.0180 again. On the day, the USD has likely made the highs for the week against some pairs. Look for corrective action overnight as the market prepares for the last piece of news for the week; US balance of Trade Friday morning.

GBP/USD Daily

Resistance 3: 1.9680
Resistance 2: 1.9650
Resistance 1: 1.9620/30
Latest New York: 1.9526
Support 1: 1.9500
Support 2: 1.9480
Support 3: 1.9450

Comments
Rate falls through 1.9650 support area and stops drive trade lower, support at 1.9500 area now in play. Bounce likely from here. Look for continuation of the recovery Friday. Look for a re-test of the 1.9600 area within 24 hours; likely ahead of the London Fix Friday. Close under the 1.9700 handle today likely washed out longs; shorts will cover before the weekend. Bounce back to trade at or near the 1.9720 area by the end of the week suggests a rally is coming. Upside remains limited in my view but ranges can be wide as evidenced by the past few days of trade. Sell rallies if not short; buying dips dangerous.
Closes over the MA’s likely not to last so a rally over the 100 bar MA a good sell in my view.
Some pressure from EURO remains. Cross-spreading for Yen, Swissy and EURO evident.

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


EUR/USD Daily

Resistance 3: 1.5500/10
Resistance 2: 1.5480
Resistance 1: 1.5450
Latest New York: 1.5400
Support 1: 1.5380
Support 2: 1.5350
Support 3: 1.5300/10

Comments
Sharp follow-on break is sold by system accounts; likely a bounce is coming. Rally over the 1.5400 handle significant. Rate holds opening range on the fall-back; solid sign of no sellers left. Break under 1.5300 area on stops suggests more losses are coming; bounce likely first. Support at 1.5280 is firm near-term. Look for rotation higher next 24 hours. Rate clears close in stops again. Strong long-liquidation break is still coming; Watch for two-way volatility. Be ready to re-short quickly if a rally happens; look for a short-covering rally to stall around the 1.5550/1.5600 area again; look to re-short in that area.

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

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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

Today’s US Dollar Trading

• USD opens mixed, ends lower
• Technical levels hold gains in check
• Stops in range

Overnight Preview
• Look for two-way action to continue
• Technical trade likely

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 08:30 Export Prices ex-ag
• 08:30 Import Prices ex-oil
• 08:30 Retail Sales forecast 0.0%
• 08:30 Retail Sales ex-auto forecast 0.5%
• 10:00 Business Inventories 0.3%
This data likely to be a non-event. Markets are really watching for the larger data due on Wednesday.

Summary
The USD is ending the day heavily mixed to start the week. Initially firmer in overnight Asia the Greenback gave back hard-won follow-on gains from European trade at previous S/R areas against most major pairs. Cable advanced on cross-spreading demand to post a high print in New York for the day at 1.9635 making the day an outside-range engulfing bar on the daily; a strong potential reversal signal from the two-month lows at 1.9441 earlier in the day. Although the trade was considered a strong signal the volumes were not impressive suggesting the rate will follow-through only modestly the next 24-36 hours. EURO rallied back to the potential sell-zone in the 1.5550 area for a high print at 1.5572 before dropping back a bit on the close. Traders note stops in range triggered on the rally over the 1.5450/60 area overnight; lows at 1.5365 went unchallenged in New York. Model account demand also seen suggesting that momentum traders are coming in on the buy side. Also active in USD/JPY, model forex traders likely had their stops too close to protect themselves against a reversal suggesting that the EURO and the Yen will whipsaw traders the next 24-36 hours. Look for a pullback in both pairs; EURO/JPY also active overnight suggesting the USD will remain under pressure against the Yen near-term. Highs in USD/JPY at 104.05 were offered rumored by semi-official names and the rate is off the highs to finish New York. For the most part, the Greenback had a solid two-way day against most of the majors and despite the two-way action is holding between established support and resistance. The GBP likely will follow-through to the upside a bit but sellers are expected to show at the 1.9680/1.9720 area. EURO has likely made the high for the week seeing as no real stops over the 1.5550 area were seen today and that is precisely where they would have been if shorts were active over the weekend; aggressive traders can look to ADD to open shorts in EURO at the 1.5550 area OB today and tomorrow. Looking ahead, expect technical trade to dominate ahead of Wednesday’s CPI data; Tuesday’s data likely no factor.

EUR/USD Daily

Resistance 3: 1.5600/10
Resistance 2: 1.5570/80
Resistance 1: 1.5550
Latest New York: 1.5535
Support 1: 1.5500/1.5490
Support 2: 1.5450
Support 3: 1.5400

Comments
Bounce is developing nicely, rally over the 1.5400 handle significant. Rate holds opening range on the fall-back; solid sign of no sellers left. Rally back from dip under the 1.5400 on stops suggests more losses are coming but a corrective bounce is needed (which is developing now) Support at 1.5280 is firm near-term. Look for rotation higher to end about now—the next 24-36 hours. Rate clears close in stops again. Strong long-liquidation break is still coming; Watch for two-way volatility. Short-covering rally stalled where expected in the 1.5550/1.5600 area again; look to re-short in that area now.

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

Tentative EuroGroup Finance Ministers Meeting

USD/JPY Daily

Resistance 3: 104.80
Resistance 2: 10450/60
Resistance 1: 104.10/20
Latest New York: 103.92
Support 1: 102.50/60
Support 2: 102.00
Support 3: 101.80

Comments
Rally back from the Friday lows likely a Head-Fake; double –top has formed and a strong sell signal suggests a potential short is now confirmed at the 105.00/50 area again. Rate has broken trend line support. Traders note that the market continues to trade technically and expect stops to be run in both directions near-term; expect more volatility. Looking for the rate to briefly follow through higher for a short-covering rally through Tuesday but fall harder into mid week; likely in the 10460/80 area. Day traders may get a lot of opportunity as the rate will likely cover a lot of the same ground twice on the hourly time frame. Stops could be in size at the 102.50/80 area. Resistance at 104.80 area remains significant now and rallies should be sold.

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

7:50pm CGPI y/y 3.6%
7:50pm Current Account 1.95T

Analysis by: Forexpros.com written by Jaso