Today’s US Dollar Trading
• USD reverses from highs overnight, ends mixed
• US data neutral to favorable but no follow-through
• Volumes lighter as traders are confused
• Traders expect two-way action with the majors to consolidate
• Likely the USD will remain technical until NFP on Friday
Looking Ahead to Thursday
All times EASTERN (-5 GMT)
• 8:30am USD Unemployment Claims 374K
• 10:35am USD Natural Gas Storage
• 12:00pm USD Philadelphia Fed President Plosser Speaks
Despite neutral-to-better US data today the USD was unable to extend gains from yesterday and ended the day mixed. Better against GBP, the Greenback pushed Cable into early lows at 1.9424 after clearing stops under the 1.9500 handle in Europe. Traders note that cross-spreaders are on the offer and most of the action was related to non-USD pairs. Although the rate was on the defense most of the day traders report nice bids from sovereign names supported on every dip. Offers are said to be building around the 1.5480 area with stops layered above suggesting that late shorts are playing a very tight stop. EURO fell back a bit but was supported as well on dips; low prints at 1.5418 were never challenged and as oil prices rose and fell so did EURO making for whippy trade. Traders note that Russian names were active matching other calls for sovereign interest on the lows. Analysts remind that the 1.5500 area likely to offer at least one pullback if the rate rallies but stops are just above suggesting late shorts are running tight risk control similar to GBP. USD/JPY had a tight two-way range today but still inside yesterday; finishing back above the 105.00 handle at around the 105.15 area; large bids said to be under the rate around the 104.40 area but lows at 104.52 left those unchallenged. Traders note that volumes were light on the day and that down action appears to have some teeth to it but caution that the stops are still higher; roughly the 105.50/60 area. Could have some whipsaw also overnight. Swissy was firm around the 1.0420 area to end the day after bids were uncovered in the 1.0350/60 area this morning. Positive ADP data lifted the USD off of the lows but offers above the 1.0440 area contained the rally. Traders expect overhead resistance to hold but the rally could extend to 1.0520 area near-term. In my view, the USD went nowhere today and with good news out of the way it is likely that NFP will disappoint. How the market trades the next 24 hours is important to the set-up; I am looking for quiet two-way action to end in USD weakness by this time tomorrow. I don’t think the Greenback has what it takes to lift into new weekly highs when facing down a serious piece of data later this week. Should be a quiet overnight session.
Analysis by: Forexpros.com written by Jason Alan Jankovsky
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.