The USD continued its march higher against the major pairs today after putting in a fragile bottom overnight. Despite the lack of volume and the key support numbers trading in Asia USD traders continued to find offers outweighing bids for the New York session.

Leading the drop lower was EURO dragging GBP behind it; low volume breaks into the overnight low at 1.4908 were bought by large names traders say but that was not enough to prevent a break into stops under the 1.4900 handle for a low print at 1.4880. Cable was forced lower as well finding stops at the 1.9100 handle and 1.9080 area for a low print at 1.9066; traders note that stops were the main driver into the lows in GBP and EURO suggesting that buyers have been active on the dips but offers still are larger near-term.

USD/JPY stalled at the 110.40/50 area and was unable to extend overnight gains as the rate continued to lag the other pairs. Cross-spreaders for EURO and GBP continued to underpin the majors against the Yen and traders expect more from the Yen on the downside near-term but admit that order books are getting thin on the decline. USD/CHF also stalled for a high print at 1.0882 overnight and held firm all day near the highs but still was unable to extend gains. In view of the Majors dropping to technical support twice in the past 48 hours the USD appears to be overbought across most studies.

A reversal is due and depending on the strength of that reversal it is possible that the USD is trying to develop a new uptrend. In my view, the correction in the long-term USD downtrend is still valid but the correction is due to end and the downtrend is due to resume. Look for US data tomorrow to be USD neutral to weaker.

Volumes have been lighter on this rally than last week and large names are buying the dips; it appears the USD rally is about done despite excessive extension of the ranges.

Today’s US Dollar Trading

•           USD finds stops and advances
•           USD Sellers attempting to take control
•           Volumes lighter on the advance

Overnight Preview

•           Advance likely to suffer profit taking
•           Longs due to liquidate

Looking Ahead to Tuesday

All times EASTERN (-5 GMT)

•           8:30am USD Trade Balance
•           10:00am USD IBD/TIPP Economic Optimism

Big day for the GBP and the Yen for data.

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