The USD is two-way into the New York close as traders continue to fear global recession and potential intervention from our trading partners. Rumors that the BOJ was ready to sell Yen to stop the recent sharp rally against most major pairs helped the USD score gains against the Yen but the potential correction has likely run its course and sellers of the rate will return near-term once the US FOMC releases the latest interest rate policy tomorrow; traders feel that the recent volatility in the majors has likely run its course near term as volumes begin to show signs of improving.

Rallies in most of the worlds equity bourses certainly helped the majors but there is concern that the equities markets can't hold gains as a "sell the rallies" sentiment continues to offer sellers in the indexes. In my view, the USD is likely due for a correction lower and I would look for the majors to rally through the end of the week making this month a consolidation month after the recent strength in the Greenback.

For the day the GBP had a high print in New York trade at 1.5831 finding stops and solid buying off the overnight lows seen in early Asia overnight. Traders note that stops were about where expected after the recent sell-off.

EURO also rallied for a high print at 1.2628 in late New York trade; although both rates were inside ranges it clearly shows the majors are under upward bias near-term.

USD/JPY sold off overnight on follow-through for a low print at 92.47 before a rally brought new buying; high prints at 97.79 into late New York.

In my view, it should be apparent that the USD is overbought and due for a correction. Look for the Greenback to weaken through the end of the week. It is likely that the market is voting positively to an FOMC rate cut tomorrow; likely to be followed by more rate cuts from our partners as well. Look for the USD to continue lower by the end of the week.

Today's US Dollar Trading

•           USD falls back for the most part
•           Volumes a bit better late
•           Traders note a correction is likely

Overnight Preview

•           Look for more weakness near-term
•           USD likely to correct on good volume as equities rally

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

•           8:30am USD Core Durable Goods Orders m/m
•           8:30am USD Durable Goods Orders m/m
•           10:35am USD Crude Oil Inventories
•           2:15pm USD FOMC Statement
•           2:15pm USD Federal Funds Rate

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