The USD is stronger across the board after a weak start in Asia overnight; volumes have been light all day traders say and technical trade has been the rule. Staying mostly within established ranges the Greenback failed to extend strength with any conviction but rather remained within established recent ranges and covered a lot of the same ground twice.

Making new lows after the London fix, EURO remained on the defense all day and fell to a low print at 1.5634 before seeing short-covering from weak shorts. Highs in the rate were an unimpressive 1.5740 making the EURO stuck near-term inside recent ranges.

GBP fared a bit better for the bears with low prints at 1.9664 clearing stops under the 1.9700 area again; traders note that cross-spreading for the Yen pairs kept the two-way action alive in Europe as whipsaw in most pairs forced out weak hands overnight. Both EURO and GBP again suffered from weak equities but shrugged off poor US housing data this morning.

Dropping a larger than expected 4.7% Pending home sales created a brief flurry of activity but once that was out of the way the EURO and GBP settled into a slow grind lower until minor stops were hit and shorts covered into the break. Technical trade is expected again overnight and tomorrow leaving the majors vulnerable to another dip lower. USD/JPY stalled on the approach to the 107.50 area; high prints with light stops at 107.55 but traders say volumes on the move were almost nil. Option defense and offers are layered ahead of the 107.70/80 area suggesting that the top is in.

Asian sovereigns were seen on the offer as well making the USD vulnerable at this level. USD/CHF benefited from cross-trade and general USD bids to score a high print at 1.0343 making for a double top on the daily charts. Again, volumes were light. In my view, a low volume rally into a significant technical area suggests that the majors will reverse again overnight; the question is when will the majors make a sharp move instead of range-trade? In my view, it would be a good idea for traders to consider shorting the USD on any additional strength the next 24 hours. US news due is not market moving in my view and the majors are trading technical. Look for a correction lower tomorrow in the greenback.

Today’s US Dollar Trading

•USD weaker in Asia, then rallies
•Two-way technical action but thin volumes
•US data no help for the bears

Overnight Preview

•Look for the USD to consolidate and reverse
•More two-way action expected

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

•10:35am USD Crude Oil Inventories

Light start to the week, traders watching G8 summit closely.

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