The USD is mixed in solid two-way flows this morning after a muted start to the week; the Japanese markets were closed today for a minor holiday and volumes were light as a result. Traders note that liquidity was better, most notably against the GBP, and early trade was dominated by the EURO/JPY pair. Traders mostly on the bid for EURO overnight as most of the EURO pairs were higher; EURO high prints at 1.2899 with stops noted above the 1.2900 area and option barriers layered to 1.2950. Traders also note that semi-official names seen on the offer into the overnight highs suggesting that downward pressure may help continue a wider consolidation range.

GBP had a high print at 1.6402 before selling pressure capped the rally; traders note that clearly the upside was due to cross-spreaders working the sterling crosses from the bid side. Solid two-way flows in both EURO and GBP suggest that consolidation in both pairs will continue ahead of economic data later in the week. More so as a source of near-term direction is the US presidential election on Tuesday. Traders note that either parties platform presents challenges to restoring job growth and economic prosperity.

Some desks believe the USD will sell-off after the election and are positioning for that move; others feel a euphoric rally as a vote of confidence in the winner may result. In my view, it is likely that the USD will have a muted response because no matter which party wins the white house the USD focus has been on much bigger problems and either party has the work cut out for it. The USD/JPY is firm in solid two-way action as the Japanese holiday leaves many sidelined. High prints at 99.66 with lows at 98.21 making for a tight range compared to recent action. Traders note that black box systems on the offer for Yen overnight although volumes remained light. In my view, this morning is just "business as usual" for the majors.

No real news is on the block for today and most traders are watching the fallout from the elections before placing a lot of faith in near-term USD direction. Most action today likely to be confined to existing ranges. Higher equities overnight may help US stocks today and possibly boost the USD but I think the ranges will hold. Look for another quiet night tonight as traders look to square-books ahead of the election.

Overnight Asia/Europe

• Japan closed for minor holiday
• USD firm in two-way action
• Yen crosses in focus, mostly for Sterling

Today's Economic Reports
All times EASTERN (-5 GMT)

• 11:00am USD ISM Manufacturing PMI
• 11:00am USD Construction Spending m/m
• 11:00am USD ISM Manufacturing Prices
• All Day USD Total Vehicle Sales

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

• 10:00am USD Factory Orders m/m
• All Day USD Presidential Election
• 10:45am USD FOMC Member Fisher Speaks 

 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