USD Technical Forex Analysis for Forex Traders
The USD ended the New York session lower but off early weakness as two-way technical trade dominated after US news this morning. A weaker NY Man. Index was offset by flat housing data today helping to keep a bid tone to equities lifting the major indices to key resistance during the day; USD traders sold the Greenback as risk-aversion mitigated a bit allowing the majors to hold moderate gains into the end of day. Traders note stops in-range in most pairs as profit-taking from recently set USD shorts lifted the USD off lows but sentiment remains corrective as the DX fell to critical support around the 86.50 area before bouncing; late longs likely on the bid as the DX reached near the 50 day MA in light trade. The result was a pullback in the major pairs but across the board the USD remained under pressure.
GBP dropped off from overnight highs at 1.4232 to trade the 1.4080 area leaving a bit of a sell wick on the daily charts; cross-spreaders for GBP pairs were aggressively buying the other side helping the EURO as EURO-Sterling returned to hold the .9200 handle. EURO high prints at 1.3072 as model accounts were seen on the bid over 1.3000 area last night but the rate has dropped to the 1.2980 area into the close suggesting some profit-taking by the recent longs. Key support is seen near the 1.2880 area and traders noted stops under the 1.3030 area intraday adding to some of the volatility. Should the rate fall back a bit underlying tone is firm some desks report suggesting that a "buy the dip" mentality may be in play. USD/JPY found light stops in-range to the 95.66 high prints but the rate retreated under the 98.00 handle briefly as exporters remained on the offer despite bids from large names and general USD firmness in this pair.
Ending the day around 98.20 area will likely encourage more bids overnight but traders warn that a drop in equities the next few days likely will pressure the USD/JPY near-term. If the exporters are still willing to sell strength the upside may be tough going in that pair. USD/CHF ends the day around 1.1850 area after an early dip to the 1.1800/10 area; low prints at 1.1804 still above technical support said to be around 1.1780 area. Stops are likely in size under the 1.1780 area as well and if the rate can't hold the 1.1900 handle near-term a long-liquidating break is probably in the works. Traders note that bids were thinning out above the 1.1880 area overnight suggesting that buyers are likely expecting a pullback before making a try for a new long. USD/CAD regained the 1.2700 handle but only briefly; intraday high prints around the 1.2720 area were sold and the rate returned to the 1.2650 area quickly suggesting offers are waiting on strength to start the week. Ending near 1.2680 is around tech support but traders warn of stops under the 1.2620 area. In my view, the focus for USD strength appears to be shifting away from flight-to-quality buying the last few sessions. With firmer equities on the board and progress appearing to be made in resolving the economic issues some liquidation is likely being seen. Expect more two-way action the next 24 hours but with a bearish tone for the USD.
Today's US Dollar Trading
- NY Fed index weaker, housing data flat
- Stops in range driving some trade
- Likely some profit taking seen by USD shorts
- Look for more two-way action
- USD to have a weaker tone next 24 hours
Looking Ahead to Tuesday
All times Eastern (-4 GMT)
- 8:30am USD Building Permits
- 8:30am USD PPI m/m
- 8:30am USD Core PPI m/m
- 8:30am USD Housing Starts
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