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There are unusual market mechanics in play on the U.S. midday session; stocks have bounced off their lows, oil prices are higher, gold is higher, Treasuries have stabilized, and yet the dollar is finding buyers. This is a complete reverse of the trade pattern that we have seen in the last three months, and leads to the fact that dramatically overbought major pairs may just have re-aligned that situation, and shaken out any weak hands that may still have been in play from recent moves, TheLFB Trade Team members said.

That may be addressed by the market now looking to buy dollars if stocks move higher later in trade on Thursday. The reaction has set up the following price action points they said:

  -Gbp/Usd: The swing points to break will be 1.6450 going long, and 1.6100 going short, and trades around 1.6200 in the middle. 
  -Eur/Usd: The swing points to break will be 1.4250 going long, and 1.4050 going short, and trades around 1.4150 in the middle. 
  -Usd/Cad: The swing points to break will be 1.1150 going long, and 1.0950 going short, and trades around 1.1050 in the middle. 

Equity markets showed weakness in early Wall Street trade that allowed the dollar to reverse European market selling. The major pairs, ingeneral, are sitting at the opening prices, and as such signaling little in the way of high probability trades that may be able to follow through ahead of a busy economic calendar that runs through to Friday U.S. trade, including the Non-farm Payroll release, the Trade Team said.