Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
U-Turn or Perfect Storm? Globalization at Crossroads - 22nd Oct 19
Stock Market Indexes Struggle and TRAN suggests a possible top - 22nd Oct 19
Fake Numbers Fueling the Wage War on Wealth - 22nd Oct 19
A Look at Peak Debt - 22nd Oct 19
The Coming Great Global Debt Reset - 22nd Oct 19
GamStop Became Mandatory - 22nd Oct 19
Learn to Spot Reliable Trading Setups: ANY Market, Any Market Time Frame - 21st Oct 19
How To Secure A Debt Consolidation Loan Even If You Have A Bad Credit Rating - 21st Oct 19
Kids Teepee Tent Fun from Amazon by Lavievert Review - 15% Discount! - 21st Oct 19
Stock Market Stalls: Caution Ahead - 21st Oct 19
Stock Market Crash Setup? - 21st Oct 19
More Stock Market Congestion (Distribution) - 21st Oct 19
Revisiting “Black Monday Stock Market Crash October 19 1987 - 21st Oct 19
Land Rover Discovery Sports Out of Warranty Top Money Saving Tips - 21st Oct 19
Investing lessons from the 1987 Stock Market Crash From Who Beat it - 20th Oct 19
Trade Wars: Facts And Fallacies - 20th Oct 19
The Gold Stocks Correction and What Lays Ahead - 19th Oct 19
Gold during Global Monetary Ease - 19th Oct 19
US Treasury Bonds Pause Near Resistance Before The Next Rally - 18th Oct 19
The Biggest Housing Boom in US History Has Just Begun - 18th Oct 19
British Pound Brexit Chaos GBP Trend Forecast - 18th Oct 19
Stocks Don’t Care About Trump Impeachment - 17th Oct 19
Currencies Show A Shift to Safety And Maturity – What Does It Mean? - 17th Oct 19
Stock Market Future Projected Cycles - 17th Oct 19
Weekly SPX & Gold Price Cycle Report - 17th Oct 19
What Makes United Markets Capital Different From Other Online Brokers? - 17th Oct 19
Stock Market Dow Long-term Trend Analysis - 16th Oct 19
This Is Not a Money Printing Press - 16th Oct 19
Online Casino Operator LeoVegas is Optimistic about the Future - 16th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

U.S. Dollar Under Pressure as Pairs Shorts Squeezed

Currencies / Forex Trading Jan 26, 2009 - 09:41 AM GMT

By: ForexPros

Currencies Best Financial Markets Analysis ArticleThe USD is mixed this morning after starting better in Asia; the Greenback is giving back gains across the board and opens new York better against CHF and JPY—lower against CAD and about flat against GBP and EURO. Overnight comments by BOE MPC member Blanchflower were seen as GBP-negative as he remarked “obviously rates are heading towards zero” and unemployment would rise;GBP low prints in Asia at 1.3547 were inside Fridays’ range and the rate is recovering to make highs in early New York at 1.3878 topping Friday’s highs.


Traders note that shorts were caught wrong-footed after the news and covered as the rate inched up over the 1.3700 handle; a potential short-squeeze is in the works and more large stops are reported resting near the 1.3900 area and above. Cross-spreaders for Yen and EURO are also getting pinched a bit suggesting the rate is bid across all pairs making for a well-coordinated buying effort.

EURO is slightly lower but on the rise no doubt being pressured by Cable; low prints at 1.2860 were again at technical support around the 1.2850 area with highs at 1.2988 so far. Traders note stops are likely on a break of the 1.3030 area which has acted as resistance the past few sessions. In my view the EURO is set to advance this week as most of the interest rate picture is factored in and economic news from the US this week is expected to be USD-bearish for the most part. Should GBP advance and hold over near-term resistance it likely will take EURO with it.

USD/CHF high prints were also inside range at 1.1647 but the rate is holding under the 1.1580 area in early New York suggesting that resistance over the 1.1580 area is solid near-term. Low prints at 1.1533 were supported but the last few days of closes have been around the 1.1520 area so a test for lows today would be crucial I think to a potential top forming in the 1.1580/1.1650 area.

USD/CAD is lower and dropping to new lows under Friday’s close, low prints at 1.2174 are under the 50 day MA and under near-term fib support suggesting the rate will decline for the week; high prints in early Asia at 1.2391 were on low volume traders say also lending support to a down move coming.

USD/JPY is higher overnight as support at the 88.50 area continued to hold; low prints at 88.25 were quickly bought in Asia as follow-on selling from Friday’s weak close failed to find additional sellers. High prints in late European trade at 89.49 leaving a fairly tight range but showing signs of a potential short-squeeze to end the month. In my view, last week was the important week for the USD as continued signs of topping against most pairs suggest the USD will end the month net higher but well off the lows. A lower close this week for the USD will signal a lower Feb as well I think. Look for the USD to remain under pressure through mid-week data.

GBP USD Daily

Resistance 3: 1.4010/20, Resistance 2: 1.3950, Resistance 1: 1.3880

Latest New York: 1.3878, Support 1: 1.3550, Support 2: 1.3500/10, Support 3: ?

Comments

Rate falls back to open Asia but rallies to trade better on the day after MPC Blanchflower comments fail to depress the rate; light stops seen on the move over the 1.3700 area as late shorts get squeezed. Aggressive bids seen and the rate recovers as New York trades. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom with shorts losing this morning. Stops and aggressive selling drive the rate to a 23.0 year low last week. Short-squeeze delayed after first attempt to rally was sold back. Overnight economic news seen as neutral to bearish; rate trading on technical’s now. Signs of the bottom may be showing up as “smart” buyers reported in GBP Wednesday and Thursday night last week. Spillover from EURO likely but modest. Look for two-way action into this bottom. A short-covering rally is increasingly likely now. Late sellers likely in or hurting.

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

6:00am GBP CBI Realized Sales

EUR USD Daily

Resistance 3: 1.3150, Resistance 2: 1.3100/10, Resistance 1: 1.3030

Latest New York: 1.2986, Support 1: 1.2850/60, Support 2: 1.2800/10, Support 3: 1.2750/60

Comments

Rate follows GBP higher but still lower on the day despite new highs in New York at 1.3004 at writing; drop is less volatile and the rate holds tech support at 1.2850/60 area. Rally all day today suggests a short-squeeze is in the works. Stops baked on the dip under 1.2880 again overnight; stops increasingly likely around 1.3030 area and layered above. Bulls are attempting to find a bottom. Bottom may be forming around the 1.2850 area as it has bounced three-times from there. 50 bar MA failed now likely to offer resistance and a close above suggests the bottom will be in. Close over 1.3000 to end the day today will be seen as positive for a rally. Semi-official and sovereign bids and offers seen last week. Technical levels around the 1.3300 area now likely to offer resistance so expect two-way action and consolidation. Aggressive traders can look to buy the next dip.

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

2:00am EUR German Import Prices m/m

4:00am EUR German Ifo Business Climate

4:00am EUR Current Account

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

Forexpros offers the most definitive Forex portal on the web. It contains industry leading market analysis, up-to-the minute news and advanced trading
tools which provides brokers, traders and everyone involved in the financial market with an all-round guide to Forex.

Copyright © 2009 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