Afternoon US Dollar Wrap-Up

After an unexpected absence it is good to be back. Wrapping up today’s USD action, the Greenback continued inside two-way ranges established earlier in the week for the most part. Although a bit of overnight news was seen as a bit positive for the majors, the USD continued to remain firm after being on both sides of unchanged into the New York close. Closing a little on the week side, traders note that today’s ISM data was less than positive for the USD but note that on the break lower major pairs were still unable to ignite stops said to be resting above the recent highs. GBP is still basing between the 1.9700 handle and the 1.9800 handle with stops said to be getting thicker on either side. Offers reported in the 1.9780 area and indeed the high print for cash GBP was 1.9777 ahead of the London fix and the rate has been slowly grinding lower all afternoon.

Same story for EURO for the most part, traders complain of lower volume and near-constant fixation with the Yen carry trade; analysts note that EURO has left liquidation stops untouched for several sessions while smaller accounts seem to be placing stops close-in suggesting that the rate will continue to remain two-way and range bound. Some traders are looking for a BOE rate hike tomorrow and should the markets be surprised by an unexpected rate hike it is logical for the GBP to rally hard and most likely that would take EURO with it.

 USD/JPY remained under the big number intraday with a high print at 119.10 and traders say volumes were large on the offer. After the highs were in during European trade overnight the USD/JPY fell back as traders squared books ahead of the BOE rate announcement overnight and of course the US Non-Farm Payrolls data due out Friday. For the most part today’s action was fairly subdued with anticipated ranges holding fast and providing short-term traders with the bulk of the opportunity. Look for volumes to remain quieter into late European trade ahead of the BOE rate announcement. I would not be expecting a rate hike but should the MPC hike I would look for a 25 BP hike and nothing else.

EURO/USD Daily

Rate rotates higher to top of range, continues to respect consolidation between roughly 1.3430 and 1.3300 areas; fallback to 1.3180 area ideal for a buy point but I would not suggest going short at this level. Looking for quiet volume and book-squaring ahead of BOE rate announcement; rally to follow GBP higher if the BOE surprises with a rate hike.

USD/JPY Daily

Rate at a clear technical buy point—