The USD whipsawed today initially falling in Asia and then rallying in Europe before falling back again during New York trade. Not a lot of news supported the trade action today; overseas news was mostly supportive to the EURO and the GBP but both of them were under selling pressure early. US data this morning was USD neutral to negative but the Greenback held gains initially.

Although the USD fell back to suffer minor losses against Swissy, Loonie and JPY—the USD held good gains against the GBP as UK data and rhetoric caused a stop-driven panic ahead of US trade today. Falling all the way down to a 1.9468 low print after a high at 1.9700 today’s GBP trading can only be described as “whipsaw”. The GBP recovered to trade 1.9580 into the close in New York making a mess of most balance sheets.

Traders note that stops were run in both directions suggesting that the rate was long into the highs and then short into the lows. Leaving a long bid-tail like today’s action argues for more upside follow-on buying tomorrow. With a light economic calendar it is likely that trade will be technical the next 24 hours but with an upside bias. EURO rallied to the 1.5553 area before falling back with Cable but rallied into the end of the day again to close above the 1.5510 area suggesting more upside to come tomorrow. In my view, the majors head-faked everybody today and more losses for the USD are coming.

Today’s data was seen as mildly neutral to slightly bearish and I think that most traders were temporarily focused on UK and Eurozone data this morning; once the PPI and Current Account data sink in and are compared with the poor housing data I think a further decline in the Greenback will be warranted. Look for the USD to sell off the next 24 hours or so.

If holding longs in the majors get ready to add to open positions as more gains are coming I think.

Today’s US Dollar Trading

• Overseas data USD negative
• USD rally falters in US trade
• Volumes lighter

Overnight Preview

• USD likely to remain technical in nature
• Look for more downside pressure

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

• 10:35am USD Crude Oil Inventories

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