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 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%

Forex Analysis by Forex Trading expert Jason Alan Jankovsky at ForexPros.com. For more
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