Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Dollar Continues Firmer Trend

Currencies / Forex Trading Jan 13, 2009 - 11:37 AM GMT

By: ForexPros

Currencies Best Financial Markets Analysis ArticleAfter starting better this morning after a firmer overnight session the USD ends mixed as technical two-way action and thin conditions continue to dominate near-term. Traders note that some price action was “unexplainable” today, such as a fast 80 point rally shortly after the London fix in EURO which immediately fell back but the damage was done; the 1.3400 handle traded and that is important to the chart-watchers after the low prints at 1.3289 traded early in the day. Aggressive traders can buy EURO on any test of the lows under the 1.3300 area in my view.


GBP continued to soften as well but held lows around the 1.4800 area; low prints at 1.4811; overnight highs remained unchallenged in New York trade at 1.5179. Traders note some stops on a break of the European low around the 1.4900 area with cross-spreaders likely the main interest.

USD/JPY made new lows during the day at 88,87 and remained in the low 89.00 area afterwards; weak equities certainly contributed to the weakness as the DJIA had triple-digit losses but likely technical factors helped as the 89.00 area rumored to have option defense in that zone. Traders note that USD/JPY remains the firmest currency on the board and likely will press for an attempt at new lows near-term.

USD/CHF failed to follow the volatility seen in other pairs, although a new low in New York was traded. High prints at 1.1244 went unchallenged and lows at 1.1096 were not enough to break the pair out of last week’s ranges. Volumes were low as they were in other pairs but additional pressure was seen from the metals complex; gold off sharply on the day. The big mover to the upside today was

USD/CAD; high prints at 1.2177 found stops above the 1.2050 are and 1.2100 area of technical resistance; the rate settled firm on the day near the highs helping to sketch out a potential wedge pattern in the daily charts. Aggressive traders shorting the rate likely have been stopped out on the move and a test of the next level of resistance likely another sell. In my view, today’s action was exaggerated price moves due to thin conditions. Tomorrow will likely have thicker volume and with most pairs having cleared a lot of stops a reversal could be in the works.

Expect a USD follow-on rally in Asia as Japan gets back to work after the minor holiday yesterday. Volumes should drop off ahead of US data in the morning. Look for two-way action to continue.

GBP/USD Daily

Resistance 3: 1.5480 , Resistance 2: 1.5420 , Resistance 1: 1.5350 , Latest New York: 1.4826

Support 1: 1.4800/10 , Support 2: 1.4760 , Support 3: 1.4720

Comments

Rate falls back to start on follow-on selling; cross spreaders still pressuring EURO/GBP spread. Spillover from EURO likely but action still technical. Stops noted under 1.5100 and 1.5050 area; more likely under the 1.4980 area. Rate recovers from lows in early New York to trade back above the 1.5000 area. Stops above the market likely now in the 1.5180 area or above as late traders place risk close-in. Bears took a stand above the 1.5250 area last week; likely they will be back again so look for two-way action near-term. Sellers likely active suggesting a dip back to potential support around the 1.4700 area although a close over 1.5100 today might negate that. Two-way and firmer action due to cross-spreaders liquidating EURO-Sterling; repatriation also lending to the firm tone.

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

4:30am GBP Trade Balance

4:30am GBP DCLG HPI y/y

5:00am GBP CB Leading Index m/m

EUR/USD

Resistance 3: 1.3850 , Resistance 2: 1.3800 , Resistance 1: 1.3750/60 , Latest New York: 1.3379

Support 1: 1.3280/90 , Support 2: 1.3250 , Support 3: 1.3200/10

Comments

Rate two-way but falls through stops to make double-bottom at monthly support; rally back over the 1.3400 handle quickly suggests the bears are losing control from above the market and the dip may have been a technical correction. Super-fast correction after making lows was a “drive-by” traders say. Cross-liquidation continues. Rally back as official bids absorb offers under the 1.3350 area. Sovereign offers seen into the highs last week traders say but those may be covering into the dip this morning. Traders note sovereign offers seen above the 1.3640 area again and this time the sellers are winning. Aggressive liquidation by EURO-Sterling cross spreaders providing the main selling. Technical levels around the 1.3300 area are firm; look for a solid bounce from here. Correction lower is likely near its end, likely at a buy point on this dip to start the week.

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

2:00am EUR German WPI m/m

2:45am EUR French Gov Budget Balance

4:00am EUR ECB President Trichet Speaks

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

© 2005-2022 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