Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

U.S. Dollar Continues to Sketch in a Significant Top

Currencies / Forex Trading Nov 26, 2008 - 11:33 AM GMT

By: ForexPros

Currencies Best Financial Markets Analysis ArticleThe USD continued to slide today after the release of benign US Q3 GDP estimates; traders note that early USD strength was stop-driven on low volume suggesting that the Greenback is running out of committed buyers as we head into a holiday shortened week. Analysts remind that year-end book-squaring will likely add a bit of pressure to the USD and technical factors are not positive after the turnaround seen the past 72 hours or so.


Today’s announcement by the US Fed that additional liquidity products will be available, most notably the purchase of commercial paper, sends a double-edged message to the markets. On the one hand it adds credibility to the commitment to bail-out the credit crisis as a positive; on the other hand it adds one more flood of liquidity to the market that is not responding by loosening credit. In my view, with all this cash held in reserve it is only a matter of time before that cash goes into the system and that is a big negative to the USD in my view. Today’s trading seemed to back up this point of view as the USD was whacked for the second day.

GBP rallied hard through stops layered above the market and came near a two year high at 1.5476 before sellers capped the move. Likely early longs liquidating and shorts covering squared off with the shorts loosing into the last full day of trading this week. Technically the GBP has put in a reversal by trading above last week’s highs and traders note that volumes were only fair on the move suggesting more two-way action will be the rule. EURO high prints more subdued but still over resistance at 1.3082 with stops noted above the 1.3050 area; lows at 1.2803 went unchallenged after the US data through the London fix.

USD/JPY fell to weekly support at 94.92 missing stops said to be resting in that area. Overnight highs in Asia at 97.44 again show offers are willing on rallies.

USD/CHF fell through key support at 1.1880 for a low print at 1.1829 making a solid show of long-liquidation; traders note the recovery back to the 1.1880 area show the bulls are not quite willing to throw in the towel at this point.

USD/CAD again tested support is high volatility with a low print at 1.2124 before rallying a full two-handles highs to end above the 1.2300 handle; traders note that thin conditions probably exaggerated the moves but tell that to the late bulls who were crushed on the move. In my view, the USD is continuing to sketch in a significant top. With a long weekend now in play it is likely the USD will continue to whipsaw and volumes dry up ahead of Thursday. Look for interest in the markets to drop dramatically after the US open for the last round of news this week. Have a great weekend and see you on Monday.

GBP/USD Daily

Resistance 3: 1.5680, Resistance 2: 1.5620 , Resistance 1: 1.55550 , Latest New York: 1.5510

Support 1: 1.4700/10 , Support 2: 1.4650 , Support 3: 1.4550 ,

Comments

Late rally extends to clear resistance—traders note aggressive bids across all pairs. Quiet corrective action in light trade overnight. Good bids reported but supply seen from semi-official names. Stops in range helps to pressure but support is on technical numbers around 1.5050 area. Traders note solid two-way action with stops building above the market likely in the 1.5250 area and higher. Sellers hold control above 1.5100 area so far but how the rate trades into US news today will tell more. OK to buy if flat on a dip. Traders also note the same names seen in size on the bid the past few days has been on the offer overnight. Profit-taking likely to result in a squeeze on the further strength.

Technical trade overnight as traders decide near-term action with little to go on but the charts. BOE rate cut next month increasingly likely but that is likely completely factored in at this point. Traders note liquidity is only moderate and still on the lower side. Aggressive traders can look to buy the next dip.

Data due Wednesday: All times EASTERN (-5 GMT)

4:30am GBP Revised GDP q/q

4:30am GBP Index of Services 3m/3m

EURO/USD Daily

Resistance 3: 1.3200 , Resistance 2: 1.3120/30, Resistance 1: 1.3100, Latest New York: 1.3070

Support 1: 1.2800/10. Support 2: 1.2730, Support 3: 1.2650

Comments

Late rally with spillover from GBP clears all resistance; next level due around 1.3130 area or slightly higher. Possible reversal now in play but the rate needs to be firm within 24 hours. Bids are building under the 1.2600 area as expected; sell-off likely to be bought hard now. OK to try the long side again on a dip. Likely some spillover support from GBP. Traders note stops building above the market around the 1.2750 area in size cleared suggesting rate will look for the stops noted around the 1.2950 area with more over 1.3000 but offers likely to cap. Support also from cross-spreaders as they unwind Yen. Rate is an absolute screaming buy in my view—I can’t see further weakness being ignored by the buyers. Traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market.

Data due Wednesday: All times EASTERN (-5 GMT)

2:00am EUR German Import Prices m/m

All Day EUR German Prelim CPI m/m

Analysis by: http://www.Forexpros.com - Written by Jason Alan Jankovsky

Forexpros.com - With a solid background in financial markets, our goal is to provide both novice and experienced traders with neutral and unbiased information on specific financial segments, including Brokers, Fund managers, Real-time quotes & charts, Courses, Books, Software Providers, Educational & Training.

Copyright © 2008 by ForexPros.com All rights reserved.

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.

ForexPros Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules