Overnight Asia/Europe

• USD firms a bit

• Technical trade and stops drive GBP and EURO

• Volumes moderate

Today’s Economic Reports

All times EASTERN (-5 GMT)

• None for the day

Expect technical trade for the most part

Looking Ahead

All times EASTERN (-5 GMT)

• 9:00am USD National HPI Composite-20

• 10:00am USD Consumer Confidence

• 10:00am USD House Price Index m/m

• 10:00am USD Richmond Fed Index


The USD is two-way overnight but starts the New York session on the offensive. Still range-bound against Swissy and Yen, the Greenback has recovered some of the losses from late last week. After starting firm in Asia and weakening on exporter supply, the USD/JPY has advanced back to the 107.80 level for a high print in New York at 108.89 but traders see a lot of offers layered up to the technical resistance area of 108.00/10. Stops are said to be over that figure but the overall sentiment is for lower USD/JPY for the week. Swissy is back in the sell zone around the 1.0440/50 area; aggressive traders can look to sell the pair anywhere over the 1.0440 area in my view. The rate is technically weak trading higher on lighter volume and stops above the 1.0410 area so a pullback and long selling wick would be ideal today in that pair. Cable has dropped dramatically tracking EURO lower as both rates suffer from cross-spreading and poor German IFO data. Cable fell from the high print at 1.9760 overnight for a low print in early New York at 1.9699 and remains under pressure. Traders note that the lower-than-expected German IFO data disappointed EURO dropping the rate back into close-in stops at the 1.5550 area for a low print in late Europe at 1.5498 where Asian sovereign demand was seen. Aggressive traders can look to buy EURO under the 1.5520/30 area today and expect a buy signal during New York action today. Across the board traders note that volumes are modest and action is technical. All the pairs are trading inside established ranges from last week so nothing really significant is happening just yet. In my view, you can expect a further decline in GBP today and through the week while the USD/JPY and USD/CHF will likely remain range-bound and under pressure. Expect a slow-grind in those pairs. EURO is likely to firm up and advance this week as the technical’s look positive and the market needs to price in a 25 BP rate hike coming in two weeks from the ECB. Look for the USD to remain two-way but weaker today.

Analysis by: Forexpros.com written by Jason Alan Jankovsky


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