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 Strength Expected to Dissipate Towards End of the Week

Currencies / Forex Trading Jan 15, 2009 - 10:14 AM GMT

By: ForexPros

Currencies Best Financial Markets Analysis ArticleThe USD ended the day fairly subdued after most of the day’s action centered around this morning’s release of US retail sales data; coming in weaker the news was seen as neutral to bearish for the Greenback but the USD continued to hold its own against the majors through the day’s action. Most pairs fell into new lows on the day after erasing gains seen in Asia to start the day making the potential upside for the USD look better into the close but the facts are tomorrow’s US data cannot possibly be seen as supportive suggesting that the USD rally has run out of upside momentum.


Also, the ECB is set to announce their rate policy tomorrow and analysts are expecting a 50 BP cut; most feel that is largely factored in. Analysts say they will be watching the statement more so than the actual rate cut looking for long-term clues to the ECB policy moving forward. Low probability for no cut in my view but that would be a big surprise to the markets.

On the day, GBP remained under pressure testing overnight lows after the start of New York trade at 1.4490 but holding the 1.4500 handle most of the day; briefly rallying to the 1.4600 handle but failing to hold on short-covering. Traders note that cross-spreaders for Yen and EURO continued to be the main focus for most of the past 24 hours.

EURO also fell in sympathy selling with GBP for a low print at 1.3092 bouncing all the way back to trade the 1.3200 handle briefly; the rate remains very two-way and leaves a large selling wick on the day suggesting selling pressure remains on rallies. Traders note that semi-official and sovereign bid interest was seen on the dips under 1.3200 suggesting a near-term bottom; aggressive traders can be buyers under the 1.3200 area in my view but be ready for whipsaw.

USD/JPY traded into stops around the 88.80 area for a low print at 88.60 but rallied right back to hold the 89.00 handle into the close; traders note that shorts are getting nervous the more time the rate holds above the 89.00 area as stops are light underneath and the rate can’t find active sellers. In my view, the upside is due on a short-squeeze.

USD/CHF failed to extend to the upside as well making a high print at 1.1243 and falling back to the 1.1160 area; some analysts were looking for a test of the range both ways but the rate was unable to extend losses under the 1.1150 area today leaving the potential for more two-way action the next few days.

USD/CAD rallied and held gains all the way to a high print at 1.2495 erasing resistance for the most part. I would look for further strength to be sold but the upside numbers appear a distance away; possibly as high as the 1.2700 area. Tomorrow’s PPI and Philly Fed is likely to be USD negative; expect a sell-off in the Greenback before the week’s end.

GBP/USD Daily

Resistance 3: 1.4850 , Resistance 2: 1.4780, Resistance 1: 1.4700/10

Latest New York: 1.4572, Support 1: 1.4470/80, Support 2: 1.4450, Support 3: 1.4400

Comments

Rate firms after finding support at the 1.4490 area overnight; lower into support level before a “dead cat bounce”. Minor signs of the bottom firmly in after holding the 1.4500 handle during the day. Cross-spreaders continue to sell GBP across the board. 2008 lows likely target but sellers are drying up in my view as volumes have been light on this break. Spillover from EURO likely but action still technical. Bears took a stand above the 1.5250 area last week; likely they will look to cover into significant lows—look for two-way action into this bottom. Sellers likely active suggesting a dip back to potential support around the 1.4500 area; but a short-covering rally is increasingly likely now. Two-way and firmer action due to cross-spreaders liquidating EURO-Sterling; repatriation also lending to the firm tone.

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

NONE

EUR USD Daily

Resistance 3: 1.3500/10, Resistance 2: 1.3450, Resistance 1: 1.3380

Latest New York: 1.3165, Support 1: 1.3080/90, Support 2: 1.3000/10, Support 3: 1.2960

Comments

Rate two-way, holds support from yesterday suggesting the bottom may be forming around the 1.3200 area. 50 bar MA failed to offer solid support and selling may have been late-follow-on and will be squeezed out. Semi-official and sovereign bids seen at the 1.3200 area. Cross-liquidation continues. Sovereign offers seen into the highs last week traders say but those may be covering into the dip this week. Overnight semi-official bids reported by some desks. 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 but some momentum still there for lower action.

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

2:00am EUR German Final CPI m/m

5:00am EUR CPI y/y

5:00am EUR Core CPI y/y

7:45am EUR Minimum Bid Rate

8:30am EUR ECB Press Conference

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