The Greenback suffered another day of whipsaw today failing to extend recent ranges in thin trade. For the most part,… … USD traders are looking ahead to more conclusive news due overnight and tomorrow from both our trading partners and here in the US.

After failing at highs overnight, the USD
managed to recover and try for new highs in most pairs but failing to reach
into the zones of reported stops to the upside while traders watched for
news on other markets; such as oil and equities. Oil prices managed to whip
EURO around making new lows for the US session but failing to reach into
real money interest under the 1.4600 handle; overnight lows continued to
remain unchallenged in US trade. Holding the 1.4700 area into the close is
encouraging to the bulls but the big news will be US GDP tomorrow; traders
are looking for a revision upwards but likely will wait for a test of the
1.4600 handle before making a move. GBP continued under pressure with EURO
for most of the session moving under the 1.8400 handle to test the low
1.8300's but volumes are thin traders say. A brief look under the 1.8300
area for a low print at 1.8283 was enough for stops to be triggered but the
rate is back in the 1.8330 area into the close suggesting that bids are
there but light so far. USD/JPY failed to rally and hold the 110.00 handle
again for the 7th day in a row suggesting that offers remain thick at the
highs; trades note that tonight's Japan data may encourage more volatility.
Swissy rallied again into the 1.1000 handle but failed late in the day
suggesting that offers are thick in that pair also. Aggressive traders can
sell above the 1.0980 area for a break lower to end the week. USD/CAD
rallied as well but again was unable to attract bids and remained mired in
the 1.0400 handle under the zone of offers said to extend into the 1.0530
area for now. In my view, today was just another day of two-way action with
the exception of the GBP; look for the USD to fail again overnight and test
the bottom of the range ahead of US data in the morning.

GBP/USD Daily

Resistance 3: 1.8650

Resistance 2: 1.8600

Resistance 1: 1.8530

Latest New York: 1.8349

Support 1: 1.8280/90

Support 2: 1.8250

Support 3: 1.8220

Comments

Only pair to fall to a new low but volumes light on the move suggesting
overshoot. Rally back in sympathy with EURO. Overnight volumes better
traders say; cross-spreaders active in Sterling and EURO suggesting that the
USD will be pressured for both pairs near-term. Drop is drawing
profit-taking bids suggesting the bottom is finally finding a low print.
Overdue for a short-covering rally. Likely an exhaustion dip and the rate
will recover soon. Look for a bottom the next 48 hours. OK to stand aside
but I want to wait just a bit before buying. So far, two-way trade is
suggesting GBP is overextended. Close back above the 1.8580 area argues for
further gains; aggressive traders can buy the close but again I would wait
just a bit. Stop-driven break is likely a head fake in my view. Offers above
the market mixed with stops from late shorts so be ready for whipsaw the
next few days. Traders expect GBP to track EURO through this week. Continue
to expect a lot of cross-trading.

Data due Thursday: All times EASTERN (-4 GMT)

2:00am GBP Nationwide HPI m/m

6:00am GBP CBI Distributive Trades Realized

7:01pm GBP GfK Consumer Confidence

EURO/USD Daily

Resistance 3: 1.4880/1.4900

Resistance 2: 1.4800

Resistance 1: 1.4760/70

Latest New York: 1.4723

Support 1: 1.4570

Support 2: 1.4550

Support 3: 1.4520/30

Comments

Rate bounces back as close-in stops drive trade; remarks from ECB encourage
a round of short-covering. If rate can hold above the 1.4750 area on the
close good chance of follow-on buying to end the week. EX reversal overnight
suggest tie to buy a new dip under the 1.4700 handle (?). Oil firmer likely
to help upside, this is a buying opp in my view but we need to wait through
US data this morning. Traders suggesting that the rate is vulnerable to a
short squeeze. Market is heavily short now so expect a rally. Aggressive
traders can continue buying this dip for a return to resistance. Rate
continues to track Cable and vice-versa. Now that stops are cleared a
rotation higher is coming. US data this week likely to be unfriendly so be
ready for whipsaw.

Data due Thursday: All times EASTERN (-4 GMT)

3:55am EUR German Unemployment Change

4:00am EUR M3 Money Supply y/y

Analysis by: http://www.Forexpros.com – written by Jason Alan Jankovsky

Disclaimer:

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.