Despite a falling Oil market and a weak Gold market today, the USD was unable to extend gains again after a mid-day rally that looked like highs might score after the London fix. All the majors had rallied a bit ahead of light economic news and minor follow-on bids overnight that were turned back as the Greenback regained some poise and Equities moved higher.

RHS interest in EURO at the London fix failed to provide downside pressure and heading into the end of the day the EURO is back on the offensive but still lower on the day. Trader’s note that the break into new lows on the day was on light volumes suggesting that the last group of late shorts has ponyed-up leaving the rate vulnerable to a rally the next 24-48 hours.

Low prints were at 1.4671 and light stops reported under the lows of the day previous around the 1.4690 area suggesting that some early longs were wrong-footed. As Oil rallied back to positive territory taking EURO with it the other majors also saw a recovery from the lows seen earlier.

Cable advanced back above the 1.8600 handle as shorts covered; traders note that cross-spreading for other sterling pairs helped to support the rate. Cable now has three solid buying wicks the past several sessions arguing for a near-term bottom around the 1.9560 area.

USD/JPY regained the 110.00 handle for most of the day but as Equities fell off late the rate was pressured back to the lows but still holding the Asian low in the 109.60 area; traders report stops building under the 109.40 area with bids ahead suggesting some additional whipsaw is likely ahead of US data tomorrow. If the Asian session tonight finds follow-on selling a test of the 109.50 area is likely. Swissy attempted to regain the 1.1000 handle as well keeping the bears on the defense throughout the day but pressure from technical traders are keeping a lid on the rate despite lower Gold prices today. Look for the Swissy to test the lows around the 1.0920/30 area overnight as the top is well-defended above the 1.1000 area near-term.

For the most part the USD is trapped in current near-term ranges and is likely to need some impetus to either rally or drop; in my view that will likely be tomorrow’s Philly Fed data but tonight is thick with news from our trading partners. Overnight action will likely include some whipsaw so I suggest not moving stops as long as they are out of range for the week. Look for a USD slide overnight and a test of lows before more two-way action.

Today’s US Dollar Trading

•           USD two-way, holds ranges
•           Traders report light volumes on the drop
•           Late selling drops USD lower

Overnight Preview

•           USD likely to have two-way action overnight
•           Should get quiet ahead of US data in the morning

Looking Ahead to Thursday
All times EASTERN (-5 GMT)

•           8:30am USD Unemployment Claims
•           10:00am USD Philadelphia Fed Manufacturing Index
•           10:00am USD Leading Index m/m
•           10:35am USD Natural Gas Storage

Big day for news across the board; expect some potential whipsaw.

Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more details about Forex Trading and Tips for decent earnings through Forex Trading, Please check http://www.forexpros.com