The USD starts the week under mild pressure after a brief push lower in Asia was met with profit-taking bids. Traders note that volumes are modest and the day’s action so far has been largely technical as expected after the sharp break on Friday. Most desks are looking for the Greenback to trade sideways-to-lower ahead of US data mid-week as the economic calendar is very light to start the week. Although normally closely watched this weeks’ BOJ policy meeting will likely not influence trade very much as the BOJ appears solidly on hold with interest rates despite the stronger than expected GDP last week.

Most analysts are forecasting no change in rates on Tuesday. USD/JPY traded to a low print of 103.61 leaving rumored stops untouched for now said to be resting in the 103.50 area but those are likely to get hit sooner or later; a bounce off those stops is likely but should the potential rally fail around the 104.00/10 area I think it is safe to expect the rate to continue lower to the 102.80 near-term target area. Look to add to open shorts this week.

Cable has been two-way overnight; better than expected UK housing data helping to support a bit. GBP found stops above the 1.9620 area for a high print at 1.9625 before profit-taking pushed the rate back under the 1.9570/80 area; currently on the New York lows at 1.9550 largely tracking EURO to start the week.

EURO remains firm with stops above the 1.5620 area triggered overnight for a high print at 1.5634 matching the 50 bar MA as overhead resistance. Traders expect more stops above the 1.5640/50 area to be in play today and dips to be bought; sentiment is turning more neutral from bearish and the COT report showed spec accounts trimmed short positions. Another leg higher to test the 1.5700 handle is likely this week in my view.

Adding to the upside potential is the fact that model accounts were on the sell side overnight some desks report. Swissy is higher this morning as well making the USD weaker across the board on follow-through from Friday despite two-way technical action. Look for a quiet day with existing S/R to hold through today.

With nothing really in the way of market moving news we can expect the USD to remain in tighter ranges ahead of Wednesday’s PPI data.

•Shorts cover in EURO
•Model accounts selling EURO
•Volumes modest

Today’s Economic Reports

All times EASTERN (-5 GMT)
•10:00am USD Leading Index m/m

Looking Ahead to Tuesday

All times EASTERN (-5 GMT)

•8:30 AM PPI forecast +0.2%, core +0.4%

Almost no news for this week anywhere. Trading should be largely technical. Tuesday’s data may be the highlight for the week.

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