After a solidly higher start overnight the USD is stalling at near-term highs this afternoon and has given back some gains as sentiment turns more neutral RE: the proposed US bailout. Today's US data was considered neutral-to-bearish for the USD but traders continue to ignore most fundamentals in favor of how the bailout will progress.

Lawmakers expect a Senate vote later today with the House vote due on Friday. Most traders are taking a wait-and-see view on the bill as it has failed to pass on the first try despite the huge positive sentiment that it would pass. In my view, the issue is becoming a bit more complex as the original intent of the bill appears to be clouded with new rhetoric and new conditions. Despite the potential for additional uncertainty the USD continued to trade two-way after gaining a bit earlier in the day.

GBP fell to a low print ahead of the London fix at 1.7632 before rallying a full handle higher during mid-morning. Traders note that Semi-Official names were interested in both GBP and EURO near the lows. EURO had a low print at 1.3975 before rallying back to trade the 1.4080 area at one point before dropping back a bit; traders say enthusiasm for a French plan to support banks helped restore confidence that the banking liquidity crisis is not spreading though the European system. Swissy fell off the highs more than a full figure before closing above the 1.1200 area; aggressive traders can sell the rate above the 1.1200 area in my view.

USD/JPY is failing to hold the 106.00 handle in lighter trade; Japanese names were seen on the offer above the 106.30 area making a short position above the 106.20 area a solid play in my view. Aggressive traders can also look to the buy side of EURO today. In my view, the USD is due to retreat into the next 24 hours or so. Potential whipsaw is a caution suggesting that two-way action may result from the potential lows in the majors this morning. If long today, remember the majors could cover the same ground many times the next 48 hours. Look for the USD to remain two-sided and consolidate recent price action.

Today's US Dollar Trading

.           USD fails to extend gains, possibly stalling
.           Volumes light in two-way trade
.           Traders note semi-official names buying EURO and GBP

Overnight Preview

.           Look for the USD to remain two-way
.           Consolidation likely

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