Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

U.S. Dollar Continues to Drift Lower Amidst Two Way Action

Currencies / Forex Trading Jan 27, 2009 - 05:56 AM GMT

By: ForexPros

Currencies Best Financial Markets Analysis ArticleThe USD gave back overnight gains as the Greenback failed to follow through during New York trade; at the close the majors are all better on the day but off their highs suggesting lots of two-way action and a potential short-squeeze underway. US data was better-than-expected this morning as existing home sales showed a gain suggesting that the housing crisis might be ending but savvy traders note that it will take more than one month of gains to suggest the housing problem is mitigating.

Most analysts see the gain in sales as positive but would like to see two or three months in a row of gains before calling a bottom in home sales and prices. Economic data remains light ahead of the FOMC meeting and rate announcement due Wednesday but analysts note there isn’t any cuts in interest rates coming suggesting that the rhetoric of the statement will be the main driver of near-term USD sentiment assuming that economic news due later in the week remain flat to lower.

GBP rallied off low prints in Asia at 1.3547 to trade to a high print at 1.3997 with traders expressing a rally past 1.4000 can’t be ruled out as large stops are layered above the market; late shorts were left holding the bag today as the market went one way to the highs and despite a mid-session fall back to 1.3850 area the rate regained the 1.3900 handle into the close. Traders now expect a solid close over the 1.3980 area for the month to possibly signal a bid-tone off the new 23-year lows seen last week. Traders note that comments today by BOE MPC member Blanchflower as GBP-negative but the ability for Cable to continue higher suggests more gains are likely near-term.

EURO rallied to a high print at 1.3208 before dropping back under the 1.3100 handle briefly before regaining the 1.3100 handle; closing rates around the 1.3150 area suggest more upside is coming. In both EURO and GBP a short-squeeze is likely in play.

USD/CHF was under pressure all day never seeing much higher action; the rate dropping to a new low in late New York at 1.1386 and ending below the 100 day MA. Traders note conditions were thin except into the lows suggesting that late longs threw in the towel into the end of day.

USD/CAD made a low print under near-term support at 1.2139 before rallying more than a full handle to trade 1.2274; the rate falling off into the close as well looking like a close under the 1.2220 area will turn the charts negative for the middle of the week. The slow mover today was

USD/JPY; failing to extend gains or losses beyond existing S/R with high prints in New York at 89.70 and overnight lows at 88.25. The rate is mid-range into the close for a neutral reading into Asia tonight. Look for a quiet open in Asia as China remains closed for the Lunar New Year holiday. Follow-on selling of USD is likely but also expect two-way action.


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

Latest New York: 1.3962, Support 1: 1.3550, Support 2: 1.3500/10, Support 3: ?


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 puts on weight. 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 likely in progress after first attempt to rally was sold back but recovers. 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


Resistance 3: 1.3320, Resistance 2: 1.3280, Resistance 1: 1.3200/10

Latest New York: 1.3172, Support 1: 1.2850/60, Support 2: 1.2800/10, Support 3: 1.2750/60


Rate follows GBP higher; scores highs during New York at 1.3208; rally less volatile and the rate holds tech support at 1.2850/60 area overnight and 1.3180 to end the day. Rally all day today suggests a short-squeeze is in the works. Stops baked on the dip under 1.2880 again overnight; stops around 1.3030 area and layered above cleared but more likely around 1.3280. Bulls are attempting to find a bottom. 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: - 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 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 - 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