Afternoon US dollar wrap-up
After a quiet overnight session in
Asia the USD found one more round of additional follow-through buying in
European trade, with the best performer the USD/JPY after
better-than-expected Japanese GDP data released late in Asia; scoring high
prints later in New York after the open at 117.79. Offers said to be layered
in with light stops contained the rally as the pair crossed the 117.50 area
but unable to hold the high prints for very long and eventually settled back
to a tight 117.40/60 range for the rest of the session. Traders note that
volumes were “adequate†during the move higher but dropped noticeably after
the European fix for the rest of the day.
Exporter offers were seen overnight at 117.50 area and again
near the highs traders say; analysts point to the close as significant for
near-term follow-through as the USD/JPY pair has not settled above 117.51
since late April of this year. Traders say it will be slow-going over the
118.00 handle; suggestions that the recent Yen weakness will be a topic of
discussion at the upcoming IMF, World Bank and G-7 summit starting September
15th have kept a lid on potential new longs. Cable had a two-sided day with a
“doji†star close suggesting that the recent weakness will take a breather for
at least one session; traders unable to take the rate below the 1.8600 handle
where thick stops are said to be building under the 1.8580 area.
Cross spreading for Yen and EURO appear to be the rule again
today in cable. EURO marched lower as well posting a low print intraday at
1.2647 before recovering; eventually taking a foothold above the 1.2700 handle
for a modest recovery on the day. Traders say that light stops under the pair
helped to initially move the rate lower but volumes dropped off after the lows
and the going became “tedious†through the close. In my view, the USD has had
the follow-through from momentum traders today and the lack of fresh buying at
the highs suggests that stops above might be further out of range for the
initial shorts in here; look for the USD to go two-sided again overnight but
open lower ahead of New York in the morning. Tomorrow is US Balance of Trade
numbers and I think a round of short-covering in the major pairs would be
likely ahead of the report. Look for US data to be neutral into mid-week and
technical trade to dominate after the Balance of Trade numbers; the
data-dependant US Fed will likely focus on Friday’s CPI number and traders may
wait until then to establish new positions.
GBP/USD Daily
R3: 1.8880
R2: 1.8800
R1: 1.8750
Current Price : 1.8671
S1: 1.8620
S2: 1.8540/50
S3: 1.8400
Pair rolling over to top step December, V/OI will need a day
to catch up. Gaining support from the 100 bar MA and potential long-term
uptrend; today’s “doji†star close suggests at least a one-day point of
indecision ahead of US data on Tuesday. Look for downside to be bought and
closes above the 1.8750 area argues for a rally. Stops said to be sub-1.8620
EURO/USD Daily
R3: 1.2880
R2: 1.2850
R1: 1.2800
Current Price : 1.2771
S1: 1.2720
S2: 1.2600
S3: 1.2500
Pair continues to consolidate in lackluster trade; electing
light stops on either side of S/R but unable to break decisively in either
direction. Close back at 100 bar MA argues for near-term support; stops said
to be below the 1.2580 area with bids mixed in. Upward rising wedge still a
factor for chart-watchers, look for a rotation higher should US data
disappoint USD bulls this week.
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.