Morning forex briefing
The USD opens New York slightly weaker after loosing ground overnight is solid two-way trade. Initially firm in Asia the USD began to slide off as Asian names bought EURO and GBP lifting the pairs over the Wednesday highs. Traders note semi-official and sovereign names on the bid; light stops above the highs as well suggesting that late shorts are still coming to the market.
USD/JPY fell to past Wednesday’s low as well dropping to a low print at 119.29 before general technical buying lifted the rate back to the opening ranges. Japan’s current account surplus was released better-than-expected but the Yen showed little response to the news; traders note that many players appear to be waiting for the BOJ policy meeting to end and the rate announcement to be released on Friday before placing trades. Currently to open New York, the USD/JPY is trading near Wednesdays closing levels.
EURO has significant resistance at the 1.2600/10 area analysts say and without some surprise to the market the pair likely will consolidate again for another day before making a try for the July lows; stops said to be building under the 1.2490 area again overnight. GBP rallied into the 1.8600 handle in European trade for a high print at 1.8616 before technical sellers capped the move. Speculation that the BOE may raise rates at the next MPC meeting is rising and most traders feel that a potential rate hike is not factored into pricing so GBP may have some support on any dips into the 1.8400 handle.
Today is balance of trade data due out shortly, expect volatility as the USD is at some critical numbers to open today’s trade. Stops are said to be building on either side of current pricing in the majors suggesting that high volatility and large price swings may result shortly after the release of the data. Look for the majors to hold support in this area and dips represent good buying opportunity in my view. The USD may have made the last rally of the year this past few sessions and today will likely be a turning point is US data is a disappointment to the USD bulls.
 GBP/USD Daily
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R3: 1.8720
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R2: 1.8680
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R1: 1.8610
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Current Price : 1.8547
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S1: 1.8500
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S2: 1.8420
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S3: 1.8350
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Pair holding support at 1.8520/50 area ahead of US data, look for volatility to be two-way early, GBP has solid buyers under the market but stops may fuel a near-term move into deeper support numbers if US data is seen as USD supportive. Close over the 1.8620 area fuels hopes for a recovery, 100 bar MA at 1.8670 area likely to draw selling.
 EURO/USD Daily
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R3: 1.2660
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R2: 1.2620
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R1: 1.2580
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Current Price : 1.2531
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S1: 1.2500
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S2: 1.2450
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S3: 1.2400
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Pair holding at potential triple bottom in the 1.2500/20 area seen as the bottom of the larger trading range extending up to the 1.2900 area. Look for higher volatilities the next few days as technical traders and long-term traders square-off from a significant low. Break below the 1.2490 area said to be risk of stops; close over the 1.2600/10 area likely to encourage the EURO bulls.
Jason Alan Jankovsky
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