It was a disappointing day today for equities traders as the follow-on buying seen overnight failed to inspire traders in New York today; the DJIA shed over 200 points near the end of the day putting pressure on USD bears. Crude oil lost over $1.50/BBL as well putting conflicting fundamentals in play for equities traders. The net result for traders in the majors was solid two-way whipsaw over the course of New York trade; EURO rallying to post a nine-day high at 1.3002 looking very much like a test of the resting stops rumored to be at the 1.3030 area untouched before dropping back as equities gave back recent gains.

Traders note that tight liquidity plagued the rate as EURO dropped briefly under the 1.2900 handle before rising to hold the 1.2920 area. New highs were welcome but traders note pressure from the 50 day MA likely offered technical traders a place to sell. GBP rallied off early lows at 1.4677 to rally past the 1.4800 handle looking like the rate would reverse hard into the end of day but sellers found a voice at the 1.4840 area and the rate dropped back to the near term pivot area of 1.4740 area; recent stops cleared on the dip under 1.4740 makes this area critical for both bulls and bears with downside follow-through selling likely to be met with bids as will upside be met with offers the next 24 hours. Traders expect more two-way action with the upside likely to cap around 1.5000 initially with downside support at 1.4680 area. USD/JPY followed the equities lower making new lows in New York at 91.92 and under pressure for a test of the 90.00 handle soon.

Traders note that cross-spreaders for EURO and Sterling continue to draw the lead for the USD pairs. USD/CHF fell to a low print at 1.2006 before rallying off lows to trade back above the 1.2060 area; traders note that pressure from above the 1.2150 area is still intact but with a third day holding above the 1.2020 area the bears may be losing momentum in this pair. A surprise rate cut of 75 BP by the BOC was enough to encourage bulls to press USD/CAD higher for a high print early in New York at 1.2747 before the rate reversed to trade the low 1.2500 handle but buyers again showed up on the dip and the rate is firm now above the 1.2630 area. In my view, the whippy conditions suggest that the USD is trying hard to make a top at current levels with volumes lower it is clear that the USD is still under pressure on the rallies. No new highs for the USD were met with any conviction and sellers are likely to make a stand into the end of the week.

Today's US Dollar Trading
• US data ignored for technical factors, equities pressure EURO
• EURO makes a try for the 1.3000 handle and is rejected
• Key support in GBP challenged
Overnight Preview
• Look for more two-way action next 24 hours

Looking Ahead to Wednesday
All times EASTERN (-5 GMT)
• 10:00am USD Wholesale Inventories m/m
• 10:35am USD Crude Oil Inventories
• 2:00pm USD Federal Budget Balance

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