Latest forex analysis

[ForexAnalysis]

Forexpros Daily Analysis - 17/04/08

Forex Daily Analysis

Today’s US Dollar Trading

• USD has range-bound trade despite news
• CPI as expected, Housing data worse
• EURO scores a lifetime high

Overnight Preview

• Look for the USD to consolidate with weaker tone
• Book-squaring ahead of US data tomorrow likely

Looking Ahead

• 9:00 AM CDT Thursday Philly Fed forecast -14.0

Summary
The USD was under pressure most of the forex trading day today after a quiet two-way start in Asia that saw the highs for the day. Remaining inside established ranges on the highs, the Greenback continued to probe for serious buyers but found none as today’s inflation data and housing data disappointed USD bulls quickly. Although benign, the CPI numbers suggest that producers are holding back some of the pain that the inflation pressures seem to be giving the economy at this time; PPI yesterday showed that inflation was certainly being seen at the manufacturing level while today’s “as expected” CPI numbers show the cost is not being passed to the consumer very quickly. That leaves a lot of room for the Fed to stimulate growth and most analysts are upping the forecasts to include a 25 BP rate cut at the April 30 FOMC meeting. In my view, the lack of hard downward pressure on the USD despite the bad housing data suggests that the jury is still out as to the extent of the potential for a housing rebound. Still declining the housing starts fell 11.9% while permits continued to lag. Traders took the opportunity to sell USD across the board but the lack of downside follow-through argues for continued two-way trade. The one exception was EURO which scored another lifetime high at 1.5980 and ends NY near the highs suggesting more upside on the way. Aggressive traders can look for the 1.60 area of psychological “big-figure” resistance to offer a selling opportunity. Likely to see a “first through the even” scenario and I suggest a short from above the 1.6000 handle. Cable rallied along with EURO but found resistance at the 1.9800 handle; high prints at 1.9809 before falling back with the rate dropping under the 1.9720/30 area “sell-zone” on the close. More selling expected in GBP so hold shorts if you have them. USD/JPY continued to trade two-way with high prints at 101.94 in Asia going unchallenged in NY; lows at 100.81 also unchallenged leaving most of the day mid-range. Firmer stocks were a big help for the rate and traders expect offers between 101.80 and 102.00/10 to cap further gains should the Nikkei open firmer. In my view, a sideways selling opportunity today; look for the USD to suffer more tomorrow.

GBP/USD Daily

R3: 1.9800/10
R2: 1.9750
R1: 1.9720/30
Current Price: 1.9710
S1: 1.9680
S2: 1.9650
S3: 1.9620

Although reversal pattern is active for the bounce off the 1.9600 area the long selling wick is more significant as the stops above the 1.9720/30 area “sell-zone” failed to include fresh buying. Close under the 1.9700 handle ideal but with a few minutes left to run a close under 1.9720 is still technically viable for a “head-fake” up day. Look for stops to build under the 1.9680 area in range for late longs today adding to volatility. 50 bar MA offered resistance today and as long as rate hold below; stay short.

USD/JPY Daily

R3: 102.20/30
R2: 102.00/10
R1: 101.80/90
Current Price: 101.66
S1: 101.20/30
S2: 100.80
S3: 100.50

Overhead resistance continues to remain thick with lots of offers reported between 101.80 and 102.00/20 area (?) suggesting that the rate will remain range-bound at least through Philly Fed tomorrow. Look for stops above the 102.30 area to build as well as under the 100.50 area with more at 100.00/10. If rate can hold under the 101.50 are by Friday’s trade I think a downside test of support is in the works for next week. Stops likely large under the trend line for the small up channel.

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.

 

[ForexAnalysis]

Forexpros Daily Analysis - 18/04/08

Daily Forex Analysis

Today’s US Dollar Trading

• USD two-way initially overnight
• USD data disappoints
• Ends USD mixed

Overnight Preview

• Traders look for consolidation and book-squaring
• No news is due so volatility possible

Looking Ahead

• Next week Durable Goods, Existing and New Home Sales, Michigan Sentiment

Summary
The USD ends New York mixed after a solid two-way forex trading day. Traders note that stops and USD short-covering were seen overnight and after the London fix; a short-squeeze in Cable also flushed weak hands and desks report that today’s action was not an expected reaction to the worse-than-expected Philly Fed data. Forecast at -14 the released number came in at -24.9 and was seen as further evidence the US economy is slipping into recession. Regardless of the debate the Greenback showed only a modest initial reaction preferring to remain within established overnight ranges until after the London Fix. Cable lead the complex higher as stops above the 1.9850/60 area and more at 1.9880 lifted the rate into the next level of resistance at the 1.9926 making today’s action in cable one of the largest ranges in the past few weeks; one trader made the observation “don’t try and make sense of it” when asked of the unexpected rally. A solid short-squeeze forcing out the longs is all it is and a reaction lower is likely ahead of Friday. EURO held up near the highs until comments from overseas cracked the amour of the bulls, falling into stops the rate pressed for lows at the 1.5850 area during New York but never testing the earlier lows under the 1.5800 handle Wednesday. EURO although firmer, is unlikely to rally significantly tomorrow as today’s break likely will encourage a round of long-liquidation from the nervous longs. USD/JPY held firm after the initial flurry of activity around the news; high prints came later at 102.73 challenging the resting offers said to be ahead of the 102.80/103.00 area. Traders note that across the board the USD had bids and offers in places where previous S/R was expected to contain but somehow was vaulted; apparently a lot of trade today was “unexpected” and that is pushing people to the sidelines a bit. Looking ahead to Friday no news is expected leaving the USD vulnerable to rhetoric-driven rally or breaks; if not on the right side today it’s OK to stay on the sidelines tomorrow. Forex Traders with shorts active in GBP likely stopped out so don’t rush back to the trade; tomorrow will likely end the week with volatility.

GBP/USD Daily

R3: 2.0000
R2: 1.9980
R1: 1.9950
Current Price: 1.9910
S1: 1.9880
S2: 1.9820/30
S3: 1.9780

Another “what the …..?” rally squeezes shorts hard triggering stops all the way past the comfort zone of the 100 bar MA. Now that the bids are erased there is little change of a follow-on rally without aggressive new buying and that is unlikely ahead of a weekend. Rate appears to be rallying on EURO-Sterling liquidation; not outright buying. Stops from longs likely in range from 1.9800 all the way to 1.9900 for the day-traders. Expect a fall-back soon, if stopped out—take a break. Next week is a new week.

USD/JPY Daily

R3: 103.20
R2: 103.00
R1: 102.80
Current Price: 102.59
S1: 102.20
S2: 102.00
S3: 101.80

Rate almost at resistance offered by the 50 bar MA; highs today still within established S/R of sideways range. No real action happened today despite the large rally; mostly stops and short-time frame traders some desks reporting. Look for follow-through buying to be limited and hold under the 103.00 area; a long-liquidating break is possible as profit taking hits the rate. Firmer stocks into the close today likely to give a boost in early Asia but don’t expect it to last.

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.

 

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[ForexAnalysis]

Forexpros Daily Analysis - 23/04/08

Daily Forex Analysis

Overnight Asia and Europe

• USD two-sided and consolidates
• No real market moving news

Today’s Economic Reports

• None in the US today

Majors open New York mixed

The USD is trading sideways in a reasonable pattern of consolidation this morning after a quiet two-way overnight session. No real market moving news was on tap and the majors are both sides of yesterday’s New York close. Currently at the start of New York trade the majors are mixed as light volumes and technical trade start the day. The USD is higher against the GBP; overnight highs on light volume were 1.9976 and after the release of BOE MPC minutes the rate sold off for a low print at 1.9866 on better volume. Traders say the split vote was seen as bearish and sentiment continues to be neutral to bearish long term; cross spreading for EURO continues to increase volatility some say. EURO fell back from the all-time high yesterday as traders remain cautious ahead of US data due tomorrow. Desks report thin order books but also a Swiss private bank on the bid around the 1.5960 area; highs overnight at 1.6002 with low prints at 1.5939 during European trade. Stops are likely building under the 1.5920 area and aggressive traders can look to add to shorts on a break into the 1.5800 handle; a close under the 1.5880 area argues for a deeper pullback in my view. USD/JPY is on the defense this morning as no bids were seen in Asia for a high print at 103.34 before offers took over; low prints just ahead of New York at 102.74 making the day an inside range day so far. Forex Traders note that tensions with China ahead of the Olympics and trade talks with the Eurozone are making trade “nervous” which often is seen as USD bullish; potential will likely keep USD/JPY two-way and within established ranges making for good opportunity on the short time-frames. Swissy is also locked inside range today with very little action; traders expect support at the bottom of the range near-term. In my view, today will likely remain a consolidation day with the GBP sliding around for the most part; I don’t think the EURO has another high in mind this week and I think the USD will remain range-bound through the data tomorrow. Look for data to be USD neutral-to-bearish on Thursday and for the weeks’ range to extend to the downside for the Greenback during Thursday.

GBP/USD

Resistance 3: 1.9980/2.0000
Resistance 2: 1.9940/50
Resistance 1: 1.9900
Latest New York: 1.9845
Support 1: 1.9820/30
Support 2: 1.9800
Support 3: 1.99750

Rally yesterday was indeed a head-fake so far this next 24 hours. Offers are thick ahead of the 1.9980/2.0000 area again, stops said to be under the 1.9850 and 1.9820 areas today.

Comments
Rate back below the 1.9900 handle on the day; look for continued pressure back to the support zone around the 1.9750 area.

Stops likely to drive trade lower today and rate is making lows in early New York action. Close below the 1.9800 handle opens the door for a test of the 1.9700 handle.
Upside is limited in my view but ranges can be wide as evidenced by the past 48 hours of trade. Sell rallies if not short; buying dips dangerous in my view.

Aggressive traders can sell over the 1.9880 area during the day.

EUR/USD

Resistance 3: 1.6020/30
Resistance 2: 1.6000
Resistance 1: 1.5980
Latest New York: 1.5940
Support 1: 1.5920/30
Support 2: 1.5900
Support 3: 1.5880

Rhetoric from ECB to remain hawkish, Wednesday German manufacturing news, Thursday IFO.

4-22-08 SHORT EURO/USD 1.6000 Stops @ 1.6100
Hold and look to add on a close below 1.5900 area

Comments
Market is failing at resistnace, be patient on the potential break

Overhead resistance is heavy above the 1.5980 area; traders say offers extend into the 1.6000/30 area with stops above.

Looking for a “first through the even” scenario; a strong long-liquidation break is coming and aggressive traders can look to sell into a sharp rise.

Sell zones today are 1.5980, 1.6000, 1.6020; buy zones 1.5850, 1.5830, 1.5800

Watch for two-way volatility; expect a sell signal on the hourly charts. Hook reversal still valid. Be ready to add quickly if this rally fails.

USD/JPY

Resistance 3: 104.00/10
Resistance 2: 103.80
Resistance 1: 103.50/60
Latest New York: 103.05
Support 1: 102.70
Support 2: 102.40/50
Support 3: 102.20

Yuan still marching higher taking the Yen with it.

04-21-08 SHORT USD/JPY 103.60/80 Stops @ 104.80
Look to ADD Wednesday/Thursday on a close under the 102.50 area.

Comments
Drop under the 103.00 area still labored as conditions are thin.

Traders note that the market is still trading technically and expect stops to be run in both directions near-term; expect some volatility. Day traders may get a lot of opportunity as the rate will likely cover a lot of the same ground twice on the hourly time-frame.

Need a close back under the 50 bar MA today before the start of Tokyo, REALLY making us wait for it.

Balance of trade number no factor overnight Tuesday; close under 103.00 likely to attract more selling.

USD/CHF

Resistance 3: 1.0180
Resistance 2: 1.0140/50
Resistance 1: 1.0100
Latest New York: 1.0087
Support 1: 1.0050
Support 2: 1.0010/20
Support 3: .9980

If short from 1.0180/1.0200 area hold and look to ADD on a close below the 1.0050 area today.

2-22-08 SHORT 1.0030 Stop @ 1.0130

Comments
Rate still two-way and consolidating, waiting for US housing data tomorrow most likely. Stops a risk above the 101.40/50 area; also under the .9950 area

look for a test of the lower portion on the range within 48 hours (Wednesday AM)

Expect a bounce from .9950 so OK to cover shorts and go long from that zone. Be nimble though as a break below there likely to draw aggressive selling.

No follow-through is to be respected; look for inside range day closing higher tomorrow 4-22-08 with no action over the 1.0140/50 area.

ADD on the close 4-22-08; should be Short 1.0180 Stop @ 1.0280, more on at 1.0030 Tuesday.

USD/CAD

Resistance 3: 1.0220
Resistance 2: 1.0200
Resistance 1: 1.0160
Latest New York: 1.0122
Support 1: 1.0070
Support 2: 1.0020/30
Support 3: 1.0000/.9990

04-21-08 SELL 1.0060 Stops @ 1.0160

BOC cuts rates 50 BP; slightly surprises market.

Stop was missed; OK to ADD on further weakness.

Comments
Sell signal overnight, OK to hold through the close as stops are out of range from last week. Close below 1.0000 sets up break into the bottom of the range in my view.
Massive head-fake on the news this morning but rate misses our stop; OK to ADD more on a break of the 1.0000 handle

Tested downside for light support at the 50 bar MA,

Nothing to do but continue to wait in my view.

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.

 

[ForexAnalysis]

Forexpros Daily Analysis

Daily Analysis

Today’s US Dollar Trading

• USD mixed
• EURO fails at highs

Overnight Preview

• Look for more booksquaring
• Quiet ahead of US data in the morning

Looking Ahead

• 7:30 AM CDT Durable Goods forecast +0.1%
• 9:00 AM CDT New Home Sales forecast 490K

Summary
The USD is mixed to end New York today after a correction overnight driven by rhetoric and stops. Traders note that the Greenback traded two-sided in Asia vesting both sides of the New York close and volumes were light suggesting that technical trade was dominate. Once the European session opened the USD began to climb a bit led by a drop in EURO as enthusiasm for an ECB rate hike faded. German manufacturing data was on the lighter side and the failure of the EURO to score another high after the psychological 1.60 handle traded yesterday added to a bout of profit-taking by nervous longs. Opening lower in NY the EURO ran for lows and printed at 1.5860 during the day; a close under the 1.5900 handle appears to have solidified the bears argument that a correction is in the works. Aggressive forex trader can add to shorts on a close under the 1.5880 area. Cable rotated lower for a low print at 1.9771 and found stops all the way down layered 1.9880, 1.9850, 1.9820 and 1.9800 but support ahead of the 1.9750 area suggests that the rate will bounce; look to sell a 1.9880 area bounce in my view. MPC minutes showed a split vote at the last meeting and the doves are not agreed moving forward; seen as mildly bullish the rate was unable to hold and remained under pressure all day. USD/JPY had a brief bout of short-covering and a rally to 103.50 area but as expected the rate found offers on the approach and fell back for lows at 102.74 before bouncing again for a short-squeeze to 103.80 area; close around 103.50 suggests the top of the range. In my view, the USD has had a low-volume rally that has kept prices within established ranges. I would look to sell the rally and expect a break lower on US data due out tomorrow. Look for poor housing to push the Greenback tomorrow but tonight expect a quiet overnight session.

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.

 

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[ForexAnalysis]

Forexpros Daily Analysis

Forex Daily Analysis

Overnight Asia/Europe

• USD firmer to mixed
• EURO extends losses
• GBP bounces

Today’s Economic Reports

• UK GDP +2.5 y/y, lowest in 3 years
• 9:00 AM CDT Consumer Sentiment forecast 63.3

Looking Ahead

• Too much to list! Main US releases are GDP and FOMC Wednesday, ISM Thursday and NFP on Friday

Summary
The USD is two-way and mixed to start New York; overnight action was muted ahead of the weekend. In Asia the USD had narrow ranges with the release of higher-than-expected Tokyo CPI data having no effect on the Greenback; higher equities also had little impact. Traders note that the USD/JPY had attracted a lot of large names yesterday and today’s action appears to be consolidative despite the rate posting a new weekly high overnight Europe at 104.83 last night. USD/JPY is trading in lower volume ahead of US data due for release today and most desks suggest the USD may have run its’ course for the week. EURO is again weaker building on heavy losses from yesterday; low prints at 1.5554 found technical support but the rate has broken down through the 1.5600 handle with authority and more losses are expected near term. Ahead of the weekend traders expect a short-covering rally as shorts cover ahead of the weekend but so far no sign of bid interest being there in size. GBP is higher as cross-traders liquidate EURO-Sterling crosses; highs in GBP at 1.9887 were enough to trigger our shorts again. Volumes modest and lower GDP numbers released in the UK did little to dampen the mood of the bulls. Swissy is opening New York higher on follow-on buying; high prints in USD/CHF at 1.0433 driven by stops and technical factors. The rate is above previous trend line resistance and stops said to be cleared in size leaving the rate vulnerable to a pullback. In my view, the USD has had an important technical week. With the FOMC meeting next week the market seems to be signaling that the Fed is done with the rate cut cycle. I think it is still premature for the USD to make a sustained turnaround and I think this rally needs to be seen in context of things are not improving yet. Look for the USD to pullback from these gains next week; I think we are still a ways away from a firm USD recovery. Additionally, other major central banks are still holding rates firmer than the US which I think has a longer-time frame impact and will continue to pressure USD near-term. Changing the bearish sentiment will take more than a three-week rally in my view.


GBP/USD Daily

Resistance 3: 1.99950
Resistance 2: 1.99920
Resistance 1: 1.9880
Latest New York: 1.9832
Support 1: 1.9800
Support 2: 1.9750
Support 3: 1.9700

Comments

Rate bounces nicely on lighter volume, should be a “dead cat bounce” Closing under the 1.9800 handle yesterday likely set the stage for a return to lower prices early next week.

Upside is limited in my view but ranges can be wide as evidenced by the past 72 hours of trade. Sell rallies if not short; buying dips dangerous in my view.

Look for the London fix to see long-liquidation as the pair continues to flirt with the long-term MA’s which are still bearish in my view; looking for a close under the 100 bar MA today which would be roughly the 1.9820 area.


EURO/USD Daily

Resistance 3: 1.5720/30
Resistance 2: 1.5690/1.5700
Resistance 1: 1.5640/50
Latest New York: 1.5593
Support 1: 1.5550
Support 2: 1.5520
Support 3: 1.5500

Comments

Market has failed at 1.6000 area resistance with confidence now, be patient on the potential break.

Overhead resistance is heavy above the 1.5750 area; traders say offers extend into the 1.5800/30 area with stops above.

Strong long-liquidation break is still coming; look for a test of the lows again within 24 hours. Watch for two-way volatility. Be ready to add quickly if a rally happens; likely to fail quickly.

Keep working the add order on a reasonable bounce.

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.

 

[ForexAnalysis]

Forexpros Daily Analysis

For More Forex Analysis

Overnight Asia/Europe

• Greenback starts firm then falls in Europe
• Lots of rhetoric from Europe
• Technical trade dominates

Today’s Economic Reports

• None in the US

Summary
The USD is slightly weaker this morning after a quiet start in Asia last night; traders note that firmer equities in Asia had no impact on USD/JPY this time and most feel that the market is sidelined ahead of FOMC rate announcements on Wednesday. Desks report some early demand for USD/JPY but once the European markets opened the demand fizzled; high prints in USD/JPY at 104.83 after a slow start. Exporters are noted to be ready on the offer at 105.00 with stops resting above traders say. GBP had a slow start as well but follow-through bids from Friday lifted the rate into early stops at the 1.9850/60 area and a high print in Europe at 1.9913 before dropping back when selling emerged in the EURO-Sterling cross; lows in Asia currently unchallenged at 1.9780 in early NY trade. Lots of rhetoric out during European trade and some data; traders note that the EURO seems heavy at the highs after the release of CPI data but the rate is still firmer on the day; high prints at 1.5694 with lows at 1.5592 making for some volatile trade early. ECB Mersch had no comment on the report but did emphasize that the bank is still concerned with upside risks to inflation; traders note that the market is braced for no ECB rate cut until at least Q4 2008 but note that dips are bought at key technical levels suggesting that at least for the near term the EURO will remain more two way even in a correction. Traders holding open shorts in EURO and GBP can sit tight for now as it appears that the technical S/R levels will contain dips and rallies; stops on the other side of those levels likely to be growing in size as the forex trading market is looking for a decisive move by the Fed with more rate cuts to come; if that is not the impression the markets get on Wednesday then the USD may rally hard against the European currencies. Other major pairs remain range-bound and technical in nature this morning; USD/CAD has had a volatile morning so far and buying dips seem to be the favored move to start the week. Look for the Greenback to consolidate today and into tomorrow; it’s a light calendar until then. Aggressive traders can trade from both sides as the USD is likely to cover a lot of the same ground twice.

GBP/USD

Resistance 3: 1.9980/90
Resistance 2: 1.9950/60
Resistance 1: 1.9910/20
Latest New York: 1.9883
Support 1: 1.9750
Support 2: 1.9690/1.9700
Support 3: 1.9650

Comments
Rate bounces nicely on lighter volume, should be a “dead cat bounce” Closing under the 1.9800 the next 24 hours likely set the stage for a return to lower prices early in the week.

Upside is limited in my view but ranges can be wide as evidenced by the past 72 hours of trade. Sell rallies if not short; buying dips dangerous in my view.

Drop to under the MA’s very important in my view. Long selling wick makes sell side attractive for further losses. Need down bars with higher volume to confirm.

EURO/USD Daily

Resistance 3: 1.5750
Resistance 2: 1.5720/1.5730
Resistance 1: 1.5690/1.5700
Latest New York: 1.5633
Support 1: 1.5590/1.5600
Support 2: 1.5550
Support 3: 1.5520

Comments
Market has failed at 1.6000 area resistance with confidence now, be patient on the potential break.
Overhead resistance is heavy above the 1.5750 area; traders say offers extend into the 1.5800/30 area with stops above.
Two-way trade at resistance to start on Monday suggests a deeper pullback is in the works.
Strong long-liquidation break is still coming; look for a test of the lows again within 24 hours. Watch for two-way volatility. Be ready to add quickly if a rally happens; likely to fail quickly.

Today a close back under the 1.5600 handle very important; look for a test of the 1.5550 area early this week, offers likely on a rally to 1.5700 area.

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.

 

[ForexAnalysis]

Forexpros Daily Analysis - 30/04/08

Daily Forex Analysis

Today’s USD Trading
USD ends mixed
GBP falls through support

Today’s Economic Reports
Consumer Confidence out at 62.3

Looking Ahead
All times EASTERN (-5 GMT)

8:15am USD ADP Nonfarm Employment Change -60K 8K
8:30am USD Advance GDP q/q 0.2% 0.6%
10:45am USD Chicago PMI 47.5 48.2
2:15pm USD FOMC Statement
2:15pm USD Federal Funds Rate 2.00% 2.25%

USD mixed, GBP and EURO fall through support
Actually a very unexpected day for the GBP and the EURO as the USD ends a mixed session sharply higher against the Europeans and mixed against everyone else. BOE Blanchflower was making dovish remarks this afternoon and the GBP extended losses from the London fix to make lows under the 1.9700 handle later in the day; the lack of volume from the Far East today likely contributed to the run on the stops as bids were simply not there. A new weekly low and a press for bids under the 1,9680 area left a low print at 1.9665; good enough to wreck a few balance sheets. EURO pressed into stops as well as the potential for correction continues; low prints at 1.5539 in early US trade were untouched for the end of the day and EURO rallied on dip buying but not enough to discourage the bears. Low prints under the 1.5520 area expected tomorrow after the FOMC meeting I think. Other pairs remained fairly range-bound; no real action either way with the exception of USD/JPY.
Many forex traders get so absorbed in trying to find the “best” entry point that they completely lose focus on the really important things.The most significant thing to always remember is that price action needs to be exploited from the point of view that you need to buy low and sell high in order to profit.It doesn’t matter if you are shorting the market or going long—you ALWAYS must have a buy execution lower than your sell. Anything else is a loss. Therefore, you must always be selling strength; whether or not you are covering a long or going short. Same for the other way around. It doesn’t matter if you are covering a short or going long; you must buy weakness. In the final analysis, your trading results are determined by your willingness to buy when everyone else is selling…and buy when everyone else is selling. Don’t look for the perfect place to enter. Rather look for a buy zone after a break and vice-versa.
Actually a very unexpected day for the GBP and the EURO as the USD ends a mixed session sharply higher against the Europeans and mixed against everyone else. BOE Blanchflower was making dovish remarks this afternoon and the GBP extended losses from the London fix to make lows under the 1.9700 handle later in the day; the lack of volume from the Far East today likely contributed to the run on the stops as bids were simply not there. A new weekly low and a press for bids under the 1,9680 area left a low print at 1.9665; good enough to wreck a few balance sheets. EURO pressed into stops as well as the potential for correction continues; low prints at 1.5539 in early US trade were untouched for the end of the day and EURO rallied on dip buying but not enough to discourage the bears. Low prints under the 1.5520 area expected tomorrow after the FOMC meeting I think. Other pairs remained fairly range-bound; no real action either way with the exception of USD/JPY. The rate found stops under the 103.50 area for a low print at the 103.21 number before rallying hard to re-gain the 104.00 handle; sympathy buys along with equities as well as cross-spreading likely lifted the pair. Looking ahead to US data tomorrow you can expect a volatile day in my view. First up is ADP private payrolls which have added a lot of two-way action. Next is GDP and last is FOMC—all things considered tomorrow is the day to set the tone for the rest of the week. Look for the Greenback to be quiet overnight.

GBP/USD Daily

Resistance 3: 1.9820
Resistance 2: 1.9750
Resistance 1: 1.9720/30
Latest New York: 1.9683
Support 1: 1.9650/60
Support 2: 1.9600
Support 3: 1.9550

Other Things to Watch/Open Trades/News

Currently flat—stopped out of short yesterday.

Rate has strong buy signal but top is at
resistance; possible “late” conflicting signal.

Rate under 1.9720 area important, major stops likely under the 1.9600 handle; likely to be challenged soon but given conditions a bounce is coming first.
Closing under the 1.9600 the next 24
hours likely set the stage for a return to 2008 lows near-term.
Upside is limited in my view but ranges can be wide as evidenced by the past few
days of trade. Sell rallies if not short; buying dips dangerous in my view.
Drop to under the MA’s very important in my view. Long selling wick makes sell
side attractive for further losses. Need down bars with higher volume to confirm
Overnight data unfriendly with more to come, Some pressure from EURO also.

Data due Wednesday All times EASTERN (-5 GMT)

Tentative GBP Nationwide House Prices m/m -0.5% -0.6%

EURO/USD Daily

Resistance 3: 1.5680
Resistance 2: 1.5650/60
Resistance 1: 1.5600/10
Latest New York: 1.5565
Support 1: 1.5630/40
Support 2: 1.5600/10
Support 3: 1.5480

Other Things to Watch/Open Trades/News

4-22-08 SHORT EURO/USD 1.6000 Stops @ 1.6100
4-24-08 SHORT EURO/USD 1.5650 Stops @ 1.5750

Look to add to shorts again soon.

Comments
Market has failed at 1.6000 area resistance with confidence now, be patient on the
potential break. Overhead resistance is heavy above the 1.5750 area; traders say
offers extend into the 1.5800/30 area with stops above. Two-way trade at resistance to start on Monday suggests a deeper pullback is in the works. Strong long-liquidation break is still coming; look for a test of the lows again within 24 hours. Watch for two-way volatility. Be ready to add quickly if a rally happens.

Data due Wednesday All times EASTERN (-5 GMT) Forecast Last

3:55am EUR German Unemployment Rate 7.8% 7.8%
5:00am EUR CPI Flash Estimate y/y 3.4% 3.5%
5:00am EUR Consumer Confidence -13 -12

USD/JPY Daily

Resistance 3: 105.00
Resistance 2: 104.80
Resistance 1: 104.20/30
Latest New York: 104.00
Support 1: 103.50/60
Support 2: 103.20/30
Support 3: 103.00

Other Things to Watch/Open Trades/News

Still Flat but aggressive traders can sell on a test
of the 105.00 area;

Looking at the sell side early this week.

USD/CHF Daily

Resistance 3: 1.0450
Resistance 2: 1.0420
Resistance 1: 1.0380
Latest New York: 1.0373
Support 1: 1.0320/30
Support 2: 1.0300
Support 3: 1.0270/80

Other Things to Watch/Open Trades/News

SHORT USD/CHF 1.0380 Stops @ 1.0480

Aggressive traders can sell 103.70/80 area and
hold over the weekend (Higher risk so trade accordingly)

Comments
Rate clears stops above near-term resistance. Rate now at very top of range; look for
a sell-off from here but news is needed. Pullback was bought after the fix on Friday
and the rate is firm now for a test of the 104.30/40 area again.
Test of the lower range now expected if rate can fail again at resistance.
Expect a bounce from 1.0250 now so be nimble though as a break below there likely
to draw aggressive selling. Rate has set up to attract dip buying so we need to see if
that is a head-fake. Need a failure at 1.0420 near-term to go short in my view.
No follow-through is to be respected; look for offers to show up higher than the1.0400
handle now that the bounce followed through higher.

Data due Wednesday All times EASTERN (-5 GMT)

5:30am CHF Leading Index m/m 1.46 1.54

USD/CAD Daily

Resistance 3: 1.0220
Resistance 2: 1.0180
Resistance 1: 1.0130
Latest New York: 1.0109
Support 1: 1.0100
Support 2: 1.0080
Support 3: 1.0050

Other Things to Watch/Open Trades/News

SHORT USD/CAD 1.0130 Stops @ 1.0230

Failure to close above the 101.80 area suggests
the rate has a failed rally (top of range).

ON THE LOWS TO END NEW YORK

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.

 

[ForexAnalysis]

Forexpros Daily Analysis - 01/05/08

Daily Forex Analysis

Today’s USD Trading

• USD quiet in Asia, firms in Europe
• GBP and EURO rally after rate cut
• Whipsaw in the majors

Today’s Economic Reports
All times EASTERN (-5 GMT)
• 8:15am ADP Private Payrolls, Actual+ 10,000
• 8:30am Advance GDP q/q 0.2%0.6%, Actual +0.6, -0.2%
• 8:30am Advance GDP Price Index q/q 3.0%2.6%
• 8:30am DECI q/q 0.8%0.8%
• 9:45am Chicago PMI 47.548.2 Actual 48.3
• 2:15pm FOMC, actual 25 BP cut

Looking Ahead to Thursday
All times EASTERN (-5 GMT)
• 7:30am Challenger Job Cuts y/y 9.4%
• 8:30am Personal Spending m/m 0.2%0.1%
• 8:30am Core PCE Price Index m/m 0.1%0.1%
• 8:30am Unemployment Claims 363K342K
• 8:30am Personal Income m/m 0.4%0.5%
• 10:00am ISM Manufacturing Index 48.048.6
• 10:00am ISM Manufacturing Prices 83.583.5
• 10:00am Construction Spending m/m -0.8%-0.3%

USD two-way again, GBP rallies back, Fed cuts

As expected the FOMC cut interest rates 25 BP today and changed the wording of the statement suggesting that the Fed is taking a more neutral course in the coming months. Analysts are debating that the Fed would like to see the effect of both the new liquidity windows and the government rebate-stimulus package before weighing in on further rate cuts. The Fed made clear that it is still considering the inflation pressures seen recently and the bottom line to the rate cut is a “wait and see” attitude. In response the USD whipsawed trader’s on the news; initially rising against some pairs and then getting slammed later. Forex Traders note that the rally in GBP as well as EURO are “knee jerk” responses to trade volatility and don’t expect a serious change in trend; most agree the USD “squeezed” weak longs initially. For the record, the GBP rallied on news starting this morning as other US news was not USD friendly but popped higher on stops and short-covering above the 1.9800 handle for a high print at 1.9897 before finding offers at technical resistance around the recent developing down trend. Traders note that cable has been exceptionally volatile the past several weeks and today was no exception; if the rate follows suit the next 24 hours we should see a return to the 1.9600 handle by the end of the week. EURO rallied initially on the news for a high print at 1.5645 and looks set to continue higher but offers in the 1.5650 area and 1.5680 area are said to be getting thicker so this rally off the lows may be a dead-cat bounce. Look for a lack of follow-through overnight. USD/JPY broke under the 104.00 handle in heavy trade for a low print at the 103.68 number at last look; traders note that the rate has had good selling from CTA types and exporters around the 104.60/80 area this morning. USD/CAD and Swissy also taking their lumps but not nearly as aggressively as other pairs; OK to hold open shorts across the board and let the overnight action work for us. Tomorrow is a light day for news so expect a rotation in the USD; especially against GBP.

GBP/USD

Resistance 3: 1.9950
Resistance 2: 1.9900/10
Resistance 1: 1.9820/30
Latest New York: 1.9883
Support 1: 1.9820/30
Support 2: 1.9780
Support 3: 1.9750

Other Things to Watch/Open Trades/News

4-30-08 SELL GBP/USD 1.9820 OB Stops@ 1.9920
(Should be short from this afternoon)

Whipsaw still evident, selling into the top of the trend line and volatility.

Comments
Rate under 1.9720 area important but rally back clears weak shorts. major stops likely under the 1.9600 handle; likely to be challenged soon but given conditions a bounce is coming first (which happened after FOMC) Upside remains limited in my view but ranges can be wide as evidenced by the past few days of trade. Sell rallies if not short; buying dips dangerous in my view.
Drop to under the MA’s very important, long selling wick makes sell side attractive for further losses. Need down bars with higher volume to confirm.
Overnight data unfriendly with more to come, Some pressure from EURO also.
Rate attracting bids from momentum players so look for stops close-in overnight.

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

2:00am GBP Nationwide House Prices m/m -0.5%-0.6%

EUR/USD

Resistance 3: 1.5700/10
Resistance 2: 1.5680
Resistance 1: 1.5650
Latest New York: 1.5615
Support 1: 1.5580
Support 2: 1.5540/50
Support 3: 1.5520

Other Things to Watch/Open Trades/News

4-22-08 SHORT EURO/USD 1.6000 Stops @ 1.5750
4-24-08 SHORT EURO/USD 1.5650 Stops @ 1.5750

ROLL Stops to 1.5750 on entire position; look to add to shorts again later today.

Close under the 1.5550 area sets up a test of stops.

Comments
Market has failed at 1.6000 area resistance with confidence now, be patient on the potential break. Overhead resistance is heavy above the 1.5750 area now with 1.5660 first; traders say offers extend into the 1.5800/30 area with stops above. Two-way trade at resistance to start on Monday suggests a deeper pullback is in the works. Strong long-liquidation break is still coming; test of the lows as expected Wednesday. Watch for two-way volatility. Be ready to add quickly if a rally happens; rate has BIG stops under the 1.5520 area and a break under the 50 bar MA could be swift. Rally after FOMC is a “head fake”; look for retreat within 24 hours.

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

All Day EUR Holiday: Labour Day

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.