Afternoon US Dollar Wrap-Up
After a two-sided overnight session again
today, the USD began to loose ground shortly after the start of New York
trading. Initially firmer on overnight European news the USD gave back gains
to trade lower for most of the day in technical-driven trade. UK GDP came in
about as expected and was seen as “old newsâ€; traders sold the GBP into lows
before semi-official names were seen on the bid traders say. Recovering back
above the 1.9600 handle in early New York trade the GBP built on gains to
eventually trigger stops above the 1.9650 area before offers capped the move.
Traders note that the GBP appears the firmest across the board this week as
cross-spreaders continued to own cable for Yen this week. Stalling ahead of
the 1.9680 area is about right analysts say and part of the rally can be
attributed to Friday long-liquidation in the USD. EURO also had a firmer day
net waiting until New York to rally also. Eventually topping out at 1.3189
high print, EURO gave back a large portion of those gains after the London fix
as traders note that the EURO has effectively put n a double-top at the 1.3190
area. A correction back to test the resolve of the bulls is likely and I would
look to BUY EURO on a dip back to the 1.3120/30 area should we get that next
week.
USD/JPY fell today and chart-watchers note that
today’s action on a Friday from the highs yesterday is a solid two-bar
reversal on the daily charts; most analysts would say a strong chance of a
follow-through on the sell side is likely at this point. Support is seen at
the 1.2050 area near-term with stops building under that area traders say. In
my view, today’s action is not uncommon as market players square books ahead
of the weekend. China is back from the Lunar New Year holiday on Monday and
perhaps a bit of uncertainty regarding the “catch up†needed by the Chinese is
contributing to the USD liquidation. Additionally, the USD has a solid week of
fundamentals coming and it is possible that if US data disappoints the
Greenback could remain under threat for next week. Traders note that a
potential range is developing near-term and the USD fall-back to the bottom of
the range would be the preferred method of establishing a USD long rather than
chase it. Look for the majors to firm again on Monday.
USD/JPY Daily
R3: 8350
R2: 8320
R1: 8300
Current Price : 8287
S1: 8250
S2: 8200
S3: ?
Rate has a two-bar reversal pattern from the
established low. Follow-through buying likely as a matter of general technical
trade so look for a pop higher early next week. Volumes were not large today
so wait for the next day or so to increase in volume on up days to remain
long. Look for US data to be USD neutral next week giving the range time to
form.
EURO/USD Daily
R3: 1.3250
R2: 1.3220/30
R1: 1,3200
Current Price : 1.3177
S1: 1.3150
S2: 1.3120
S3: 1.3100
Rate continues to sketch out a possible range
and a dual-distribution up channel pattern; volumes not impressive today but
higher close puts the rate at it’s best finish for the week since the start of
the year. Net buying of EURO on crosses continues to underpin; buy dips back
to 1.3120/30 area if you can get it.
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