USD Technical Forex Analysis for Daily Traders
Higher equities on follow-on strength from overnight positive stock prices helped to lift the majors against the USD with most pairs setting new highs against the Greenback in late trade. GBP regained the 1.4900 handle but still off the Asian highs of 1.5051 in New York; traders note that spillover strength from EURO is helping to hold GBP firmer.
Additionally, cross-spreaders continued to buy Sterling on the crosses also bringing the upside in focus. Today's close over the 1.4940 area is the highest close in six days suggesting a near-term bottom may be forming in that rate. EURO is two-full figures higher than Friday's close suggesting that the rate is seriously under upside bias; highest close in nine days in that pair. Aggressive traders can add to both EURO and GBP longs on the New York close this afternoon.
Despite a 300-plus rally in DJIA today USD/JPY failed to advance suggesting that re has offers waiting to hold the bulls in check; overnight high prints at 93.92 went unchallenged in New York trade and the pair closes negative on the day. USD/CHF is flirting with the important 1.2020 area on the close; making lows in late trade at 1.2017 but not holding there. Traders note that technical trade is likely to favor a close over the 1.2020 area as supportive and a close under there as negative; in my view the 1.2020 area is key to near-term direction and I would fade a rally if the market closes above 1.2020 area.
USD/CAD dropped to lows at 1.2442 overnight but that number went unchallenged in New York trade. Currently a the 1.2520 area into the end of day the rate is still off the lows enough to encourage buying the next 24 hours. In my view, the USD is set to crash this week. Look for the Greenback to falter into Tuesday's US data as again it will not be USD supportive. For the most part, the USD is benefiting mostly from very early flight-to-quality buying into the financial crisis; now that the signs are becoming clear that the crisis is mitigating and government programs are slowly beginning to resolve the credit crunch I think the USD is headed for at least a corrective pullback. Look for the Majors to extend to the upside within the next 24-48 hours in my view.
Today's US Dollar Trading
• USD fails to hold gains, equities surge on follow-on buying
• Traders note technical trade helps to lift EURO and GBP
• More two-way trade likely to develop
• Look for some follow-on buying of the majors
• Expect two-way action ahead of US data in the morning
Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 10:00am USD Pending Home Sales m/m
• 10:00am USD IBD/TIPP Economic Optimism
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