The USD is mixed to end New York after a solid two-way session driven mostly by active buying and selling. Although stops were triggered for part of today's volatility in most pairs, the majors remained inside established ranges for most of the day. Today's fundamental news was benign and not market-moving; traders remained focused on how global leaders will attempt to restore confidence to the financial system.

Finance leaders today meeting in Luxemburg made a token gesture to guarantee bank deposits up to 50K EURO in the Eurozone but most traders saw that as only a minor step. Most are looking toward a US Fed rate cut sooner rather than later with some calling for a rate cut this week. The Fed increased the lending window using the TAF program to include more potential securities or collateral but the markets appear heavily focused on a rate cut by the Fed as well as other Central Banks. While waiting for that to happen the major pairs remained whippy inside established ranges and remained two-way all day.

GBP rose to a high print at 1.7660 in early trade before backing off to the 1.7500 area and slightly below; traders note stops both ways during the day. EURO rallied in sympathy with Cable for a high print at 1.3744 before falling back as well; traders note that the lows of 1.3479 are a technical low suggesting that the larger range today off the lows may be a near-term bottom. In my view, the USD is severely over-bought near-term and a long-liquidation break is likely soon. I like buying the EURO and the GBP on dips and the markets should give us at least one try this week.

USD/JPY whipsawed all day first making highs overnight at 103.30 before dropping back to trade under the 101.70 area; the rate rallied hard on news that the RBA had cut rates but sellers were active at the highs. In the USD/JPY the threat of a coordinated rate cut scenario by the three largest CB's is keeping the Yen well-bid; traders expect more losses by the USD/JPY near-term. In my view, the USD is setting up for a break lower—keep vigilant and be ready to move on further USD strength.

Today's US Dollar Trading

•           USD remains range-bound
•           Traders see two-way action and stops as the main event today
•           Fundamentals being ignored in favor of rhetoric
 
Overnight Preview

•           Look for the USD to back and fill ahead of US news tomorrow
•           Expect current ranges to hold

Looking Ahead to Wednesday
All times EASTERN (-4 GMT)

•           7:45am USD FOMC Member Plosser Speaks
•           10:00am USD Pending Home Sales m/m
•           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