Dollar unmoved by election results
The USD was little changed and slightly mixed in Asia overnight as the details of US elections filtered through the markets Wednesday giving traders little to focus on ahead of UK and US data this morning. Staying in a tight range for the entire session, the USD got a slight boost ahead of the European open on general short covering traders say but weakened in two way trade ahead of the BOE rate announcement. Some mild speculation that the BOE might issue a very hawkish statement kept Cable well-bid but offers ahead of the 1.9070 area kept a lid on prices until the BOE announced a 25 BP rate hike just at the start of New York trade.
GBP slid lower into light stops and down to area of reported bids at 1.9010/20 area making a low print in New York at 1.9014; just a few pips off Wednesday’s lows. Traders remind that the US data today may not be USD friendly and volatility looks to be in the cards for at least part of the day today. Cable remains inside yesterday’s ranges and continues in light two-way trade ahead of US data due out shortly.
EURO is firmer against both the USD and the other crosses suggesting that general demand for EURO is cross-market; traders note that the pair is holding several levels of technical support in addition to fundamental pressures that should limit the downside at least near-term; some rumors that banks and large funds are leaning toward “parking†funds in EURO short-term instead of USD and that is lending some support to the rate. EURO today has sellers around the 1.2820 area traders say and ahead of the figure appears well-bid. USD/JPY is higher and continues to attract buyers traders say, the BOE rate hike was no factor analysts say but today’s trade data will likely move the rate into the areas of known technical resistance; most notable the 118.40 area should the US data encourage the USD bulls. In my view, the only mild reaction the GBP has had to the BOE action today suggests that the rate may be setting up for a test of the 2006 highs before a correction lower. I think short positions in GBP should be nimble for the near-term. Look for volatility in the majors today and a lower USD later in the day and for Friday.
GBP/USD Daily
|
R3: 1.9130/40
|
|
R2: 1.9100/10
|
|
R1: 1.9070
|
|
Current Price : 1.9040
|
|
S1: 1.9000/10
|
|
S2: 1.8980
|
|
S3: 1.8950
|
Pair remains firm after BOE rate announcement; only muted reaction and bids appeared at technical support suggesting that the GBP will range trade perhaps even after US data this morning. Rallies can be sold above the 1.9100 area and dips to 1.8980 can be bought. Stops said to be on either side of 1.8950 and 1.9140 so range and volatility will likely be the thing for the next 24-48 hours.
USD/JPY Daily
|
R3: 118.80
|
|
R2: 118.50/60
|
|
R1: 118.20/30
|
|
Current Price : 118.08
|
|
S1: 117.60/70
|
|
S2: 117.20
|
|
S3: 116.80
|
Pair has a slight push higher into areas of reported offers, rate will have a tough time getting past 118.60 area in my view, aggressive traders can look for a short above the 118.00 area near-term. Stops said to be resting above the 118.60 area. Close below the 117.60 area likely to draw selling and USD bulls will likely quit. Break back to 116.60 area likely to be seen as corrective and expect a bounce.
Please see www. ProEdgeFX.com for details
Jason Alan Jankovsky
Trading Futures, Options on Futures, and Foreign Exchange 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. The information contained on this email does not constitute a solicitation to buy or sell by Infinity Futures, Inc., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law.