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. 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.

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