The USD is two-way and whippy today after a losing start to the day. Across the board the USD made monthly lows to end the quarter no doubt creating a lot of risk-aversion liquidation ahead of US data and the holiday-shortened trade week. GBP has upside resistance at 1.9960 area challenged more than once on several rallies but each time the market backed off to trade lower.

Into the London fix rumors of buy-needs kept the rate firm but once the fix was gone traders sold the rate lower and the GBP made lows for the day at 1.9878; rate continued to whipsaw short-term accounts as the GBP rallied off the low to trade above the 1.9940 area briefly again.

For the most part the EURO had a similar day but dropping Oil prices helped to keep the pressure on more-so than GBP. EURO had a high print at 1.5837 but once the highs were in during European trade the EURO settled back to trade lower all day.

Traders note that in both pairs volumes were moderate and with a lower close likely all offers. USD/JPY remained on the defensive most of the morning but staged a modest recovery after the London fix as well coming close to the overnight highs with a New York high at 106.25 areas.

Traders say the rate is likely to remain two-way as Asian sovereigns have an appetite for USD on the dips while exporters are on the offer during any strength. The rate held the 105.00 handle on the morning break suggesting that a rotation higher might be good for a test of the breakdown area around the 107.50 area near-term; should that be the case there is a lot of volatility there. Swissy weakened as well but held lows at 1.0130 which were never challenged in New York trade.

USD/CHF likely to weaken more but the rate wants to rotate high and was the only major pair higher on the day today. Loonie rallied as well and cleared the 1.0200 handle briefly suggesting a lot of two-way action is coming. The rate settled back after scoring a high at 1.0215 in two way action.

Traders note that volume were good in all pairs and more two-way action is due across the board. In my view, the Greenback is set to rotate higher ahead of Non-Farm payrolls later in the week. Although whipsaw is likely as well, I think your best strategy is to sell rallies and wait for the upside correction in USD to fail.

Today’s US Dollar Trading

• USD loses ground but attempts a recovery
• Stops run
• Volumes moderate

Overnight Preview

• Two-way action likely

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

• 10:00am USD ISM Manufacturing Index
• 10:00am USD ISM Manufacturing Prices
• 10:00am USD Construction Spending m/m
• Tentative USD Domestic Vehicle Sales. Expect ISM to remain weak.

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