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Forexpros Daily Analysis - 10/04/08

Daily Forex Analysis

Today’s US Dollar Trading

• USD two-sided overnight
• Breaks lower during New York but still no new range
• Equities fall driving USD /JPY lower

Overnight Preview
• Look for follow-through selling of USD
• Book squaring ahead of US data in the morning

Looking Ahead
• 7:30 AM CDT Thursday Balance of Trade forecast -57.4B

Summary
The USD ends New York softer making fresh daily lows against most pairs after starting modestly firmer overnight. Initially firmer in Asia the Greenback remained two-sided for most of European trade and actually pressed for highs against some pairs in early New York today. Traders note that volumes were modest and flows were tight but once trade was in full swing the USD came under some light pressure. Close-in stops were seen in several pairs and once the EURO/GBP cross hit stops taking the rate into highs the USD really started to correct. Although holding previous S/R from last week and only modestly lower on the day from yesterday’s lows, traders note that the USD is more psychologically weaker due to the potential for G7 rhetoric to hurt the prospects for a recovery. Also weighing on USD today is the BOW and ECB rate announcements due out overnight. Traders are looking for no rate cut from the ECB and a modest 25 BP rate cut from the BOE. In either case, the move appears “baked in the cake” and traders expect that the USD strength leading into this week may have run its course. On the day, Cable dropped to a low print at 1.9649 overnight before bouncing higher on better UK data early this morning. High prints came after the London fix as EURO/GBP rallied to new lifetime highs and GBP was hit by stops on the way higher; high prints at 1.9798 were capped by long-liquidation traders say. EURO rallied also into highs at 1.5865 before encountering selling pressure to back off the highs; overnight lows at 1.5682 now seem a long ways away for the bears. Traders look for the rate to hold firm and attempt one more try at fresh highs; offers usually resting ahead of the 1.5880 area appear to be absent on the first round today. Stops noted above the 1.5780 and 1.5800 areas. USD/JPY rallied on BOJ rate news and potential for a new BOJ governor but high prints at 102.84 overnight were never challenged in NY forex trading; falling back to find stops under the 102.10 area and more at 101.80 area the rate had a low print at 101.49 before bids helped support. Across the board the majors did not reach any fresh ground so be prepared for a rotation the other way as the consolidation continues.

EUR/USD Daily
R3: ?
R2: 1.5900/10
R1: 1.5880
Current Price: 1.5825
S1: 1.5770/80
S2: 1.5720/30
S3: 1.5680
Rate powers higher on no news and short covering traders say, look for a brief try for highs and then a correction lower. Stops above the 1.5910 area said to be thicker now than last time the rate was here suggesting that the bears are more committed. Pair is in the sell zone of resistance so be ready for a pullback if no buyers show up overnight. Stops under the market likely back at the 1.5650 area which may be out of range today. Look for a quiet overnight session with follow- through to the upside early likely.

USD/JPY Daily
R3: 102.80
R2: 102.50/60
R1: 101.90/102.00
Current Price: 101.71
S1: 101.20/30
S2: 101.00
S3: 100.80

Rate holds at resistance again drawing sellers into the mix but total range still inside previous action so no real progress made by the bears or the bulls. Traders note that volumes were modest and tracking developments in other markets left the rate vulnerable to drifting. Stops likely under the 101.20/30 area in size, another stab for those orders likely overnight as equities disappoint Asian traders. Look for the rate to continue lower by the end of the week.

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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.

 

[muhammad kazim]

Gold steadied in early afternoon trade, recouping the losses it posted this morning after the dollar rallied in response to this weekend's G7 meeting in Washington, as the currency gave up its gains amid fears over slowing U.S. growth.

 

[ForexAnalysis]

Forexpros Daily Analysis - 14/04/08

Daily Forex Analysis

Overnight Asia/Europe

• USD firmed in Asia on G7 comments
• Faltered in European trade

Today’s Economic Reports

• 7:30 AM CDT Retail Sales forecast +0.1%, no factor

Looking Ahead

• 7:30 AM CDT Tuesday PPI forecast +0.4%, core +0.2%
• 8:00 AM CDT Tuesday TICS

Summary
The USD is softer to start New York after initially starting higher in Asia. Traders say the G7 wording invoking a change to the communiqu?’s verbiage was seen as USD supportive but the Greenback was unable to add to early gains seen in Asia. Gapping higher across the board the USD began to fall in European trade eventually opening New York on the lows for the session so far; technical levels in a few pairs are again being tested and if the USD can’t hold the current lows more downside is expected before the London fix. Today’s data will likely not be a factor as the market appears focused more on the employment and growth data but a large decline might accelerate the USD’s fall. Cable initially started softer but held last week’s low at 1.9648 for a technical double-bottom. The rate began to trade higher on lighter volume and some close in stops were seen again as the rate lifted into the 1.9720/30 area; the release of UK data helped push the GBP higher during late European trade. UK output prices hit a 17 year high and combined with a firmer EURO the GBP rallied through stops higher at the 1.9800 area and currently is on the highs in New York at 1.9875; rate almost putting in a reversal. EURO remains firm after a slow start, lows in Asia at 1.5671 attracted large names traders say and the rate recovered quickly. Mid-East buying was seen in the rate around the 1.5780 area as was also seen last week in that area; high prints in NY at 1.5876 still unable to lift through the offers resting in the 1.5880 area. Forex Traders note that the rate is building a fairly obvious rising wedge into the lifetime highs and expect at least one try for stops said to be in the 1.5920/30 area; option defense expected to be solid at 1.5920. USD/JPY is reversing hard with two-way volatility rising as well; high prints at 101.52 offered by exporters and the rate is on the lows in early NY at 100.32. Traders note that the rate is poised to find large stops that are in the 100.00 area just under the lows from last week. Should the rate break into stops it would make a rather poor showing on the charts and will likely attract additional selling on a close under the 100.00 handle. For the most part, the USD is starting the week on the defense with traders disappointed the USD couldn’t hold the early gains. Look for more downside if US data tomorrow disappoints.


USD/JPY Daily

R3: 101.80
R2: 101.50
R1: 100.80
Current Price: 100.33
S1: 100.00/100.10
S2: 99.80
S3: 99.50

Rate fails hard at recent resistance making the 102.00 area firm overhead cap; stops under the lows from last week likely growing in size. Support under the 99.50 area likely to give at least one bounce so aggressive traders can sell the next rally. Look for stops above the market to be lowered into the 101.50 area as aggressive shorts likely to think that the
high for the week is in should stops under the 100.00 area get triggered. Potential for higher prices is lower after rejection of G7 upside help.


EUR/USD Daily

R3: ?
R2: 1.5915
R1: 1.5880
Current Price: 1.5873
S1: 1.5820
S2: 1.5780
S3: 1.5740/50

Rate up against offers at this moment, size said to be on the offer but bids so far able to absorb. Stops likely over the recent lifetime high but the speed of the recovery overnight suggests that those bids are the last of the stops; lots of close-in action from daily traders some desks report. If hook reversal is negated by a close over the 1.5915 area upside target is easily the 1.6080 area in my view. Look for a lot of volatility near term as traders cope with a potential breakout.

Analysis by: Forexpros.com written by Jason Alan Jankovsky


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.

 

[muhammad kazim]

Dollar remains under pressure even as U.S. data beats expectations
A slightly stronger-than-expected U.S. retail sales report only managed to help the dollar post the smallest of recoveries, what with market players unperturbed by the G7's bland warning on sharp currency market fluctuations over the weekend.

 

[muhammad kazim]

Retail sales post modest gain in March


Consumers, beset by a credit crunch, rising energy and food costs and a prolonged housing slump, stayed away from the malls in March. Retail sales posted only a small increase after a big drop in February

 

[muhammad kazim]

Oil marches towards record as dollar drops

Oil marched towards a record high on dollar weakness and supply jitters ahead of contract expiry this week which could also be increasing volatility.


Meanwhile, players tossed aside demand fears, for now, and those that missed out on a sharp rally last week which took oil to a record bought into steadier prices seen this morning.

 

[muhammad kazim]

Mexico's peso opened stronger on Monday, helped by expectations of a wider spread between Mexican and U.S. interest rates.

 

[ForexAnalysis]

Forexpros Daily Analysis - 15/04/08

Daily Forex Analysis

Today’s US Dollar Trading

• USD two-sided, ends mixed
• Volumes light

Overnight Preview

• Look for light flows overnight
• Book-squaring ahead of US data in the morning

Looking Ahead

• 7:30 AM CDT Tuesday PPI forecast +0.4, core +0.2%
• 8:00 AM CDT Tuesday TICS

Summary
After starting higher overnight on a generally USD-positive change in the closely watched G7 communiqué, the greenback ends the first day of the week mixed in relatively light trade. After the London fix traders report that volumes dropped and the majors drifted lower as the bulk of market participants covered positions initiated on the overnight volatility. GBP rallied into highs at 1.9896 overnight but drifted lower all day to end the NY session sharply lower off the highs near the important 1.9740/50 area; traders note that the rate still is rotating around the 1.9720/30 area as near-term traders debate the significance of the previous monthly support level. EURO rallied into formidable resistance at the 1.5880 area for a high print in early NY trade at 1.5888 before dropping back during the day a full handle lower. Traders note that the rate is securely trapped in a rising wedge formation combined with drifting volumes suggesting that the rate is coiling for a strong move one way or the other. Should EURO breakout of the wedge higher offers are expected to cap at option defense around the 1.5820/30 are with stops layered above. Technical studies point to a firmer EURO near-term but mostly off a dip into the 1.5720/30 area. Traders note that large names on the bid for EURO overnight and on the break today but remind that the rate has had a very violent last few weeks; EURO could be ready for more volatility. USD/JPY felt obligated to trade along with stocks today as initial strength was sold into highs at 101.50 area and dips into the 100.30 area were bought. Closing slightly better than mid-range the rate is ready to extend losses most desks say after the disappointing reaction to the G7 data Sunday. Most forex trading desks are looking for the USD/JPY to range-trade near-term ahead of US data this week which is expected to be USD negative. Look for most of the action to be stop-driven near-term as traders try to make sense of the recent volatility. USD data tomorrow should be USD neutral as the Fed is likely more focused on employment data. Should there be a surprise in the works it most likely will be in TICS. Look for inflation data to be “as expected”; we all know there is a bit out there.

GBP/USD Daily

R3: 1.9850
R2: 1.9820
R1: 1.9780
Current Price: 1.9754
S1: 1.9720
S2: 1.9700
S3: 1.9680

Rate gives back all the overnight gains as bulls are heavily disappointed by lack of follow-through. In my view, today’s break back to the 1.9720 area after pressing into the 100 bar MA is significant as the downtrend continues to offer resistance at areas where bulls expect to gain control. Look for stops under the 1.9650 area to grow again overnight and offers above the 1.9820 area to thicken. Expect a bounce to be sold hard after a test of the 1.9650 area again.

USD/JPY Daily

R3: 102.00
R2: 101.80
R1: 101.50
Current Price: 101.08
S1: 100.50
S2: 100.00/10
S3: 98.80

Rate gaps higher then fails with highs never being challenged all day suggesting that the rate is attracting active selling; longs who bought on the news have been disappointed all day. Support at the 100.50 area is only near-term in my view and a failure on another rally to hold the 101.80 area suggests a potential for a test of the stops under the 100.00 area. In my view, it is only a matter of time before the longs throw the towel in and push the rate under the 100.00 handle.

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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.

 

[muhammad kazim]

The USD edged up against the JPY and the EUR. Concerns about the US economy and fresh doubts about credit markets are offsetting the support for the USD from the G7 statement about volatility in major currencies. The EUR/USD eased 0,1% from late trade to 1,5824, and was up from Mondays post-G7 low of 1,5658. The USD/JPY rose 0,1% to 101,18.

 

[ForexAnalysis]

Forexpros Daily Analysis

Today’s US Dollar Trading

• USD range bound ahead of PPI
• Muted reaction to the news but USD extends gains
• Traders note stops flushed

Overnight Preview
• More consolidation within existing ranges likely

Looking Ahead
• 7:30 AM CDT Wednesday CPI forecast +0.3%, core +0.2
• 7:30 AM CDT Wednesday Housing Starts and Building Permits forecast 1025K and 970K

Forex Summary
After a quiet two-way start overnight in Asia the USD stayed within existing ranges until the release of US PPI this morning. Traders note that the data was seen as USD supportive but not enough to break the USD out of current ranges; PPI out at +1.1% (well above expectations) while core was out at +0.2% (as expected). The Greenback attempted to build on initial gains but remained two-sided until after the London fix where a bit of additional buying lifted the USD into fresh highs against most pairs later in the day. Cable of course the big mover as UK data overnight was not so supportive and stops were finally triggered on the dip below the 1.9650 area. Low prints during late New York at 1.9603 erased a potential option barrier traders say and leave the door open for a test of the 1.9550 area near-term. Aggressive traders can look to add to open shorts on a rally back to test the 1.9680-1.9720 support zone. EURO also fell off a bit but remained above important support making a very strong case for the rising wedge formation to remain viable into the next round of data. High prints again at 1.5876 turned back from offers at the 1.5880 area and slightly higher traders say and after the news stops under the 1.5800 handle were triggered; lows later in the day at 1.5750 as more stops were set off. EURO is now poised to tackle a zone of bid interest said to extend from 1.5750 to 1.5720 with more stops below but most desks note that buying the dips is still on most traders minds as the downside still is seen limited until a test of the 1.6000 handle possibly changes the sentiment near-term. Expect a modest recovery from additional lows if they are seen overnight. USD/JPY continued to find bids on the dips as low prints overnight Asia at 100.78 were never challenged during NY trade; highs at 101.81 came later in the day with offers said to be thick above this area extended to 102.00 with stops beyond. For the near future the USD is tightly constrained by these existing S/R levels; stops have been in range and the volumes have been light suggesting the smaller trader is active. Firmer equities overnight likely to support the USD/JPY but for the most part the USD is range-bound. Look for book squaring ahead of CPI tonight.

GBP/USD Daily

R3: 1.9700
R2: 1.9680
R1: 1.9650
Current Price: 1.9607
S1: 1.9600
S2: 1.9580
S3: 1.9550
Rate drops back to potential support and tests the lows late in the day suggesting there is more downside coming after a slight bounce. Look for the upside to remain limited to between the 1.9680 and 1.9720 zone with follow-through selling expected tonight. Stops likely clustered under 1.9550 and layered with bids to 1.9520 area suggesting volatility is in the works too. In my view, the potential for a rally back above the previous monthly low is dropping quickly on closes at or below 1.9600.

USD/JPY Daily

R3: 102.20
R2: 102.00
R1: 101.80
Current Price: 101.54
S1: 101.00/10
S2: 100.70/80
S3: 100.50
Rate has inside range day closing higher which is technically inconclusive at this point. Traders note volumes were light and the rate seemed to be tracking equities more than other things. Additional impetus seen on tomorrow’s CPI should the data disappoint and a break back to trend line support around the 100.50 area is likely. Look for stops building in range now that the up-channel continues to be respected. A break lower very possible tomorrow with a quick drop under the 100.00 handle.