Today’s US Dollar Trading

• USD starts slow; makes a show for strength in NY

• US data mixed and of little help

• Traders await more tomorrow

Overnight Preview

• Look for a rally in the USD overnight

• Lack of downside follow-on selling seen

Looking Ahead

All times EASTERN (-5 GMT)

• 8:30am USD Core Durable Goods Orders m/m -0.4%

• 8:30am USD Durable Goods Orders m/m -1.5%

• 9:00pm USD Dallas Fed President Fisher Speaks

• 12:50pm USD Minneapolis Fed President Stern Speaks


The USD enjoyed a day of higher pricing but failed to break into any new areas of S/R against the majors. For the most part the Greenback remained inside established ranges but is showing signs of bottoming and very well may rally the next 24 hours. Today’s US data was a mixed bag and traders note that across the board the USD attracted a fairly large amount of bids relative to the volume on the day. Although the day was considered a scratch day by most the USD continued to firm into the close of New York trading. After a brief flurry of activity during the release of Housing Data this morning the rest of the day was uneventful but continued to lean on the bid side suggesting that late USD shorts have yet to be cleared if they were shorts set on the news as is typical for small-money accounts. Cable dropped to the low end of the range but was unable to score new lows in New York; overnight stop-driven lows at 1.9713 remained unchallenged into the New York close. Traders note that the rate is tracking EURO today and because EURO was under threat most of the session GBP held on the softer side. EURO made new lows for the day at the 1.5700 handle on the AM news but failed to attract size on the offer. The rally to the 1.5730 area was on light volume and the rate fell back to close near the 1.5720 area in thin trade. A low-volume day after a three-day weekend suggests that large traders are secure in their positions and haven’t made a move yet this week. USD/JPY has a big day ahead of itself tomorrow in my view as COT data suggests that the market is heavily short USD into the 104.20 area. Although large stops are still out of range it is very likely that the rate will try for highs within 24 hours as the lows today were bought hard enough to challenge the 104.20 area on three occasions today. Often that is a sign of a market looking to make a move. For the day—the USD trade remained technical in nature and the lack of follow-on selling suggests that the market has one push higher into resistance coming. Aggressive traders need to be ready to sell the USD on a spike higher and tomorrow’s action likely to give us a point of reference in at least two-pairs: 104.80 area in USD/JPY and 1.5650 area in EURO/USD. Look for US news to increase volatility but for the pairs to stall at previous S/R during the London fix tomorrow.

Analysis by: written by Jason Alan Jankovsky


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