After a slide overnight against GBP and EURO the USD rallied back in late US trade to regain some territory after oil continued to slide and equities put on some weight. The Greenback is at better levels against all the majors than the start of US trade and is poised to challenge stops above the market across the board.

Today’s US data was benign and more important data is due for tomorrows release and some traders are looking for the USD to make additional highs for the week although today’s rally volumes were not impressive suggesting that the majors are consolidating recent losses before making a more pronounced move the next 24-48 hours.

Cable rallied above the 2.0000 handle but as been the custom above the 200 bar MA does not “feel comfortable” holding gains; the GBP fell back to trade the mid-1.9900 area leaving a strong selling wick above the market. Highs at 2.0032 were on very light volumes and largely stop driven before dropping back to make US lows under the 1.9970 area. A close below the 1.9950 area again is needed to drive the longs to the sidelines and that may come on the Tokyo open in my view.

EURO fell as oil slid off and making lows for the US session and the day as well; some stops cleared as the rate dipped under the 1.5680 area for a low print ahead of the close at 1.5669; volumes were modest most desks report. USD/JPY struggled with offers at the 108.00 area managing a high print at 107.98 but has not retreated more than a few pips suggesting that a try for stops above the 108.00 area may be on the hook for tonight’s action.

Aggressive traders can place a resting limit order to liquidate longs at 108.25 looking for a test of offers at the 108.40 area; if you are really aggressive you might try a close and reverse but with US housing data still to come there is potential for the rate to try for the high 108’s the next 24 hours.

Minor whipsaw today paved the way for small accounts to get cleared as they have been on the wrong side of the stops near-term. In my view, look for the USD to consolidate with a bit more upside on the books overnight.

Today’s US Dollar Trading

• USD regains poise after early break

• Oil and equities help the upside

• Volumes moderate

Overnight Preview

• Expect two-way action
• USD to consolidate

Looking Ahead to Thursday

All times EASTERN (-5 GMT)

•  8:30am USD Unemployment Claims
• 10:00am USD Existing Home Sales
• 10:00am USD FOMC Member Geithner Speaks
• 10:35am USD Natural Gas Storage

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