Today’s US Dollar Trading

• USD retreats from Friday’s gain

• US data benign—points to more losses

• Speculation grows that USD will fall

Overnight Preview

• Look for the USD to consolidate

• Expect two-way action

Looking Ahead to Tuesday

All times EASTERN (-5 GMT)

• 8:30am USD Housing Starts

• 8:30am USD PPI m/m

• 8:30am USD Building Permits

• 8:30am USD Core PPI m/m

• 8:30am USD Current Account

• 9:15am USD Capacity Utilization Rate


The USD starts this week lower against most pairs but still two-sided as Monday draws to a close. In New York the USD saw the worst levels of the day so far as surging oil prices slammed equities and rallied the EURO. Oil prices slid off as volatility whipsawed energy prices taking the USD higher against the Swiss Franc and firming up against Yen but still unable to better the highs seen on Friday across the board. US data was benign as most reports came in lower than expected; TICS showed a decent cover but still not the whole picture as EURO remained firm near the 1.5500 handle all day. EURO rallied for a high print at 1.5520 early ahead of the London fix and keeping GBP up with it. Cable high during NY trade at 1.9690 with stops above the 1.9650 area driving the rate to the highs. Profit taking by longs dropped the rate back to the 1.9620/30 area into the close but EURO’s firmness into the end of the day suggest that both rates are poised for an additional leg higher overnight or during US trade tomorrow. If US data in the morning is again benign for the Greenback traders expect another leg lower for the USD during the day. USD/JPY remained above the 108.00 handle but under the 200 day MA making the technical picture better for the bears who argue a top is forming; USD/CHF also topping as the 1.0480 area again offers resistance all day to the USD. Highs at the 1.0523 level went unchallenged all day in NY suggesting that the Swissy is ready to drop back to below the 100 bar MA to start the week. Traders note that in all pairs the technical picture appears in focus near-term and expect dips to be bought and rallies to be sold. The big question is where are the large stops? Traders look for tomorrows’ data to push the Greenback in both directions so expect some whipsaw as the majors look for near-term direction.

Analysis by: written by Jason Alan Jankovsky


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