Morning forex briefing
The USD is trading quietly softer
to start New York this morning after an equally quiet overnight session.
Starting firmer in Asia the USD gained a bit on the majors on technical trade,
upside stops were seen from light short-covering from model funds who
apparently went home short USD for the weekend. Importers were seen on any
dips in the USD/JPY leading some to believe the USD may have established a
near-term bottom and range-trade can be expected in USD/JPY. Traders remain
cautious ahead of US data due out this week and also from developments in
China as it regards the Yuan value; look for Beijing to make some sort of
change to the Yuan value in the next week or two.
Traders note the USD/JPY may have stops building above the
117.00 area; analysts feel the USD is set to offer solid two-way trade during
the week. Cable has held resistance at the 1.906/70 area overnight; high print
a few pips over Friday’s failed high; traders note that UK clearers again on
the offer suggesting that the GBP will have a hard time gaining the 1.9100
handle without a little help from fundamentals. Traders appear comfortable
selling into rallies in the GBP and note that stops are basing under the
1.8980 area; 1.8880 is said to be very firm so cable may stick in a range as
well through the near-term. EURO is a bit weaker than GBP today; holding to
tight ranges overnight and awaiting German IFO sentiment tomorrow. Given the
recent weakness in the ZEW survey analysts are expecting the IFO to also
weaken but remain divided as to the reaction that EURO will provide. EURO held
resistance at the 1.2830 area as expected and support at the breakout from the
recent range at 1.2760 providing a solid two-way overnight session.
Traders note that near-term momentum is positive for higher
prices and that the hourly studies are not in over-bought territory suggesting
that the EURO will have a positive tone for the rest of the day. Today is
Existing Home Sales here in the US and given the recent round of data I expect
a number that will stimulate USD bulls to liquidate. The majors may have given
us all they can on the Upside near-term but a test of those highs is likely on
weaker-than-expected news this week. I would be a buyer of the majors on dips
but aggressive traders can look to sell resistance.
GBP/USD Daily
R3: 1.9150
R2: 1.9100
R1: 1.9060
Current Price : 1.9022
S1: 1.8980
S2: 1.8940
S3: 1.8880
Pair up against resistance and trading in lighter volume
ahead of US data this morning. Traders expect a USD sell-off on poor US data
but I think that rally will be sold; look for the 1.9090 previous resistance
area to offer at least one pull back. Buy a dip into the 1.8880 area should
the US data this week rally the USD into resistance/support.
USD/JPY Daily
R3: 117.50
R2: 117.20
R1: 116.80
Current Price : 116.59
S1: 116.20
S2: 115.80
S3: 115.50
Pair completers a 25.6% fib retracement Friday and holds 50
bar MA so far over a weekend, studies are neutral and US data may disappoint
USD bulls. A solid technical buy is the 116.10 area for a bounce into 117.20
area; or a sell at 117.20 for a break into the 116.10 area—