Today’s US Dollar Trading

• USD mixed, US data no help

• Stops drive a lot of early trade

• S/R broken but the majors bounce back

Overnight Preview

• USD likely to trade two-way

• Consolidation ahead of the news later in the week likely

Looking Ahead to Tuesday

All times EASTERN (-5 GMT)

• 9:00am USD Fed Chairman Bernanke Speaks

• 10:00am USD Factory Orders m/m 0.0%

• Tentative USD Domestic Vehicle Sales 10.8M


The USD ends the day mixed after starting overnight mixed against the majors. Despite slightly better-than-expected US data this morning the USD sold off to make lows against most pairs by about the London Fix; after that the Greenback settled into two-way trade that gradually ground higher to end the day mid-range. Stops were the larger part of the day’s action traders say with only the GBP dropping into technical support. For the most part the USD fell back to test recent S/R and more technical two-way trade is expected overnight as fundamental news is light ahead of NFP later this week. Cable fell back from a high print overnight at 1.9776 to post a New York low at 1.9595 before rebounding; holding above the 1.9630 area is a good clue the rate will rotate higher the next 24 hours or so. Volumes were only moderate traders say so it is possible that GBP will remain two-way within existing S/R. EURO fell through support on stop driven trade for a low print at 1.5485 before rallying out of the hole to post a high print at 1.5591 before offers capped the rally. Again, traders say volumes were only moderate and the rate is expected to remain range bound. Both pairs appear to be tracking one another so aggressive traders can look to buy dips and you can expect a signal the next 24 hours or so. USD/JPY fell through several layers of support as well dropping to a low print on stops at 104.01 before bouncing to the 104.50 area. Stops under the 104.50 area were absorbed easily but offers were finally able to push the rate into the 104.20 area and once cleared the rate rebounded on profit-taking. Swissy had an identical day but fell through the 1.0380/90 area considered to be the monthly pivot point; closing under the 1.0350 area the rate looks for more weakness near-term but as in other rates analysts expect two-way trade. Looking ahead the next 24 hours I would expect the USD to consolidate within existing ranges. Look for more opportunity to short the USD on strength near-term.

Analysis by: written by Jason Alan Jankovsky


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