UK manufacturing output came in lower than expected adding pressure to Cable pushing the rate lower through stops to trade under the 1.4900 handle; the rate dragging EURO lower as well. Low prints in Cable at 1.4871 found solid bids under 1.4900 from large banks and a few sovereigns despite selling by similar names through the evening. High prints in Asia at 1.5019 likely to be challenged in New York as volatility remains high and tech buyers note the rate slid to key support and rebounded quickly; which is likely to draw fast money traders and momentum accounts should a rebound happen by the end of day.

EURO continued to grind lower for a low print at 1.3543 holding above the 1.3520/30 key support before rebounding to post new highs in late Europe; high prints at 1.3626 in early New York suggest the rate will continue higher off the lows for the day. Traders note a large French name on the bid under 1.3550 with same name on the offer over 1.3600; tech traders note a challenge of the 1.3720/30 area is likely by the end of the week.

USD/JPY continued to climb regaining the 90.00 handle securely; high prints at 90.49 despite lower equities in Asia.  Low prints at 89.83 continued to hold the breakout test area of 89.60/80 area suggesting the rate is well-bid. Traders note the usual exporter interest on strength with offers said to be resting up to the 90.70 area; stops likely in size from shorts above the 90.80 area.

USD/CHF lifted a bit as well to trade 1.0797 for a high print again suggesting that offers are willing at or above 1.0800 with confidence; traders note that the rate has not managed a close on the 1.0800 handle for the entire month of March so far but has traded above 1.0800 numerous times. Should the rate lift on whipsaw today and trade again on the 1.0800 handle it might represent a truly strong selling opportunity.

USD/CAD continues to grind sideways to lower; a tight range for the day so afar as well. High prints at 1.0294 again failed at the 100 hour MA with low prints at 1.0251 challenging bids known to be resting under the 1.0250 area. Traders note stops likely on a break under 1.0230 area but warn bids could be quite large at the yearly double-bottom around the 1.0200/20 area. A lift in the rate back over the 1.0320/30 area likely to find offers which may keep action fairly contained near-term.

In my view, the lift in the USD overnight argues for continued topping action as the majors all extended to areas with strong support and rebounded quickly. In my view that represents solid interest to sell rallies in the Greenback. Bullish sentiment is becoming overwhelming for the USD as well with Barron’s reporting yesterday that only 4.9% of hedge fund managers were bullish EURO. Sentiment to that extreme usually means a rebound is in the works. Look for the USD to weaken through the day as the overnight highs are likely secure.

Jason Alan Jankovsky

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Trading in off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading in FOREX is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, or trade discussion are subject to change at any time.

Cable slipped into stops under the 1.5000 handle on the news for low prints at 1.4935 before recovering to the 1.4970 area. High prints for Cable at 1.5070 putting the rate near the low end of the range after yesterday’s try for the 1.5200 handle. Traders note that sovereigns were active eon the buy side around the 1.5000 and 1.4980 area; sovereigns also active in EURO overnight around the 1.3600 handle.

High prints in EURO at 1.3637 failing to advance off the 1.3620/30 support zone dropping the rate under 1.3580 area for low prints at 1.3549. Traders note model accounts selling the rate as stops were triggered under 1.3590 area; support appears firmer at 1.3550/20 area some desks report. Russian buying of EURO is expected before the close as the CB lowered the Ruble trading band for the second time in two weeks which usually means the Russians need EURO to balance the books.

USD/JPY fell back under the 90.00 handle finding light offers on the way to low prints at 89.6; high prints at 90.34 were leftover from the New York close. Traders note exporters and model accounts on the offer as the rate dropped with reports of option expiries today that may keep the rate close to the 90.00 handle in early trade. Support is expected around the 89.50 area again on any dip; the rate is holding closer to the 89.80 area in early New York.

USD/CHF is higher lifting to the important S/R zone just under the 1.0800 handle; high prints at 1.0796 with lows at 1.0725 making for an outside range and a new weekly high. The rate is expected to have offers waiting around the 1.0800/20 area on a further lift; support is still expected on a dip to the 1.0720/30 area.

USD/CAD is continuing to sketch in a potential bottom with low prints at 1.0265 but highs are above the 1.0300 handle at 1.0315. Traders noted regular sellers into the 1.0300/10 area with some signs of shorts covering. If the rate can mount a challenge of the 1.0350 area with a close above 1.0300 handle the rate may have found a near-term bottom.

In my view, the re-test of the mid-range for the recent USD consolidation argues for a sell point; the majors have attracted solid bids from current areas and the dip into mid-range S/R may indicate a last push by the USD bulls. Volumes have been lighter and the larger names appear to be interested in the dip from the buy side in most pairs. Look for the Greenback to move lower after this re-test during the day.

Jason Alan Jankovsky

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Trading in off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading in FOREX is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, or trade discussion are subject to change at any time.

It was a mostly quiet overnight session for the USD to start the week; a light economic calendar held no market moving news and traders are noting technical trade to start New York. Asian equities were firmer adding a bit to the risk-on trade but European bourses are slightly lower with US DJIA futures holding flat-to-weaker in pre-opening trade. Initially firmer on follow-on selling the USD is off the lows against most pairs and is making highs against some pairs at the transition between Europe and New York.

Traders note that volumes are quieter with most players appearing to wait for expected tech S/R before moving in size. GBP high prints in early Asia at 1.5198 where offers ahead of 1.5200 capped; the rate is reversing into lows with a low print at 1.5111 in early New York. Traders note that the rate appears to have a large group of “sell rallies” traders interested but also note that bids in size are at the 1.5100 handle and lower suggesting that the rate will continue higher near-term. EURO also lifted to reported offers with a high print at 1.3706 testing the upside of the recent established range before turning lower; low prints at 1.3622 challenging the upside breakout area seen with confidence on Friday. Traders note that in both EURO and GBP large names were not seen in size and sovereigns and semi-officials were not seen overnight in size suggesting more two-way technical action near-term.

USD/JPY initially lifted on risk appetite for a high print at 90.69 before turning lower for a low print in Europe at 90.13; if current levels hold this will make the first day since Feb 22 that the rate has traded completely above the 90.00 handle. Technicians note the rate has stalled at the 50 day MA and is holding above the 100 day MA suggesting more potential upside in a few days but warn that late longs will likely have stops under the 90.00 and 89.80 area making for a potential pullback. Momentum accounts were seen selling into the break off the highs as were exporters suggesting interest to book longs or enter shorts above the 90.50 area.

USD/CHF fell back to test support in Europe at 1.0674 before regaining the 1.0700 handle; high prints in Asia at 1.0742 found follow-on sellers and fast-money types were seen under the 1.0680 area on the bid suggesting the shorts are taking gains quickly expecting 1.0660/80 area to hold as near-term support. No sign of the SNB overnight most desks report as the EURO/CHF pair is firm as EURO holds above the 1.3620/30 area against the Greenback.

USD/CAD is lagging action seen elsewhere holding in a tight range; high prints at 1.0307 with lows at 1.0659 showing solid support at last week’s lows to start. Traders see the downside in focus at least to challenge the 2009 lows at 1.0200/20 area with large stops layered under the figure some desks report.

In my view, the Greenback will continue to sketch in this top as two-way action between tech levels continues to hem in traders on both sides. Likely the USD will attract sellers into further strength and high volatility is still very likely suggesting conditions will remain whippy to start the week. Look for the USD to end the day a bit weaker; a pullback in equities will help support a bit.

Jason Alan Jankovsky

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Trading in off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading in FOREX is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, or trade discussion are subject to change at any time.

Traders are heavily focused on developments in the Greek debt situation with clues to near-term direction in the EURO coming later today when German Chancellor Merkel meets with the Greek PM to discuss the EU response to the Greek austerity program. It is widely expected that Merkel will continue to take a hard line with financial aid but likely will endorse the Greek plan with minor modifications. Should the meeting not go well the EURO might leg lower some traders remind as the overall picture remains bearish despite recent rangey trade. US data today will no doubt create some fireworks in the majors and traders are basically waiting with both sides choosing to sit tight until the release of the news.

GBP high prints at 1.5068 and lows at yesterday’s low of 1.5004; traders note some early lift in Asia on cross-Yen action but the upside was limited and offers were seen from sovereign names into the highs. A similar story for EURO lifting to a high print at 1.3608 before turning lower to trade for lows at 1.3567; traders note sovereign sales into the highs with larger funds on the bid near the lows suggesting short-covering ahead of US data. Some desks report that the Russian central bank may be in the market to buy EURO for book-balancing needs after they lowered the Ruble trading band overnight; traders note that the Russians have been adding EURO to their FX reserves quite steadily over the past six months.

USD/JPY extended its range a bit to the upside after the US close yesterday; high prints at 89.45 found offers from the usual exporters and traders note upside may have large stops above the 89.50/60 area. Lows at 88.96 suggest that bids are finally back above the previous 88.80 S/R level with larger names likely to be seen on any dip today as larger traders have been interested on the buy side under 89.00 the past few days.

USD/CHF kept to a tighter range also rising to a high print at 1.0783 and holding a low at 1.0750; traders note that regular offers are likely above the 1.0800 handle layered to the 1.0880 area with stops likely above 1.0900 from the long-term shorts. Bids are likely back at the 1.0660/80 area with stops below suggesting a large range might be possible today.

USD/CAD continues to hold under the 1.0350 area with a high print at 1.0334 and a low at 1.0299; traders note that the rate is finding bids under the 1.0300 handle now suggesting the upside is in focus for the day. Traders note offers likely a distant 1.0400/20 at tech S/R with bids on a dip to 1.0250 area.

In my view, the USD is still trapped in a consolidation high with upside likely to be capped where it has been the past two-weeks. After NFP is out expect some whipsaw and a wider range but a net higher day for the USD is likely unless equities rally; overnight equities were firmer and a higher day for the DJIA can’t be ruled out. Look for larger ranges in all pairs but fade USD strength as the top of the range is likely to hold as the Greenback is topping in my view.

Jason Alan Jankovsky

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Trading in off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading in FOREX is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, or trade discussion are subject to change at any time.

The BOE held rates steady as expected with no real reaction seen in Cable; traders are now waiting for the ECB rate announcement which is expected to remain at unchanged. It appears the lift in the majors was a bit overdone yesterday and with a full schedule of potentially market moving news due today as well as the mitigating Greek debt situation it could be a very whippy day once again in New York.

Traders note overnight sales from semi-official sources in EURO and Cable adding to the argument that the lift may have been overdone. GBP high prints in Asia at 1.5109 with no bids seen above 1.5100 after the start of Tokyo trade; the rate found light stops from close-in longs at 1.5080 early and continued under pressure into the UK news. Low prints at 1.5020 where on tech support and the rate rallied back to unchanged in early New York looking set to challenge the highs. If the rate clears the 1.5120/30 area offers are expected on a lift to 1.5150 area.

EURO high print overnight at 1.3713 in early Asia, the rate found large names on the offer under 1.3680 area for a low print at 1.3632 where shorts were seen taking profits. The rate lifted back to 1.3680 area in early New York and traders expect more large names on the offer into the 1.3700 area if the highs are challenged.

USD/JPY continued to weaken as general demand for Yen ahead of fiscal year-end weighed on the rate; low prints at 88.12 clearing bids through yesterday’s lows. Traders note a fast rally out of the lows suggest the rate is finding bids and shorts are booking gains but the rate is still under the 88.50 area at the start of New York. High prints at 88.64 likely to remain with offers into 88.80 area today.

USD/CHF rallied as the USD recovered clearing close-in stops above the 1.0680 area for a high print at 1.0735 before correcting back; the rate held the .0660 area overnight with a low print at 1.0668 suggesting the low was a bit overextended. If the rate can close on the 1.0700 handle today a lift to end the week might be in the works.

USD/CAD is lagging a bit lifting to a high print at 1.0341 before finding offers; the rate is on the defense and is back under 1.0300 in early New York. Low prints at 1.0278 continue to be in range with a challenge of the lows likely to find stops under 1.0260 area.

In my view the USD is continuing to sketch in this potential top and a further lift to the middle of the range would be the selling opportunity. The Greenback is acting a bit toppy ahead of this break mid-week and I think the late buyer will bring a bounce ahead of NFP tomorrow. Look for the USD to continue firming today.

Jason Alan Jankovsky

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Trading in off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading in FOREX is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, or trade discussion are subject to change at any time.

Traders note some reserve manger interest on the buy side of EURO and GBP which may be related more to the EURO/GBP spread more so than outright positions against the USD. Focus turns to US data due out this morning expected to be USD bullish suggesting that a lift to test the upside S/R levels in most pairs; Greece will announce an austerity program this morning which is widely expected to be well-received by the EU and may include a request from the IMF for funding.

Some traders are looking for any program to be factored into EURO pricing possibly setting up a “buy the rumor/sell the fact” scenario resulting in downside pressure during New York action for the EURO.

GBP is correcting higher after seeing solid two-way action; high prints in Asia at 1.5078 attracted offers over the 1.5050 area and the rate dipped to a low print at 1.4957 into European trade. The rate is back near the highs in early New York suggesting bids on dips likely from shorts covering more so than buyers as sentiment still remains heavily bearish and rallies will likely be sold.

EURO is holding at tech S/R near the 1.3670 area with a high print at 1.3671; low prints from initial sellers at the 1.3650/60 area overnight put the rate back to 1.3591 suggesting that stops will likely be under the 1.3580 area from early longs. Offers are expected all the way to 1.3700 handle with stops likely above.

USD/JPY probed for stops under the 88.50/60 area putting in a low print at 88.46 before regaining the 89.00 handle briefly; high prints at 89.01 are still in range with recent consolidation suggesting the rate is trying to put in a bottom around the 88.50 area for the week. Further loses are expected to find bids closer to 88.20/30 area.

USD/CHF pressured into lows at the extreme end of the recent range with a low print at 1.0700 even; highs were at 1.0766 on a minor short squeeze and the rate is holding around 1.0720/30 to start early New York. Traders note interest is focused on the EURO/CHF cross with any pressure there expected to spill over into the Greenback on the buy side for the day.

USD/CAD is firming a bit suggesting a potential short-squeeze may lift the rate further; high prints at 1.0368 found light stops over the 1.0350 area with more likely above 1.0380/1.0400 but a lift above 1.0400 likely to find offers. Low prints at 1.0324 making for an inside range day so far in New York.

In my view, the USD is poised for a lift to test the overall potential for a top to form. Pullbacks from the highs have been bought with confidence and the majors aren’t in new territory for the most part. Aggressive traders can be ready to sell USD into a reasonable lift looking for a failure later in the week. Today’s US data is likely to offer some clues for NFP on Friday and two-way volatility ahead of the weekend is expected to remain high. Look for the greenback to firm today.

Jason Alan Jankovsky

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Trading in off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading in FOREX is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, or trade discussion are subject to change at any time.

No news from Athens on the potential progress on a Greek debt solution instead traders appeared to be sidelined leaving the volumes and conditions thinner which may have exacerbated the whippy conditions in the EURO and CHF. Traders report semi-official names on both sides of the market as the Greenback reached the best levels of the day in late European trade but also note model and momentum accounts active on the buy side. With the high volatility seen in recent trade both bulls and bears are sitting tight in size until a more clear understanding of price direction is seen.

GBP remained inside yesterday’s range but is covering a lot of ground in the process; high prints in Asia at 1.5003 before sellers capped the move again and the rate dropped back to test for lows with a low print at 1.4852 before recovering back to the 1.4980 area in late Europe. Cross spreaders were seen for GBP spreads putting a possible floor under the rate around the 1.4900 area near-term but the volatility continues in both directions.

EURO held the 1.3540/50 area to start Asia before coming under selling pressure testing for stops under the 1.3500 handle; the rate really didn’t have any impetus for a sell off but active offers were seen as the rate tried for the 1.3480 and 1.3450 areas. Stops were hit under the 1.3440 area for a low print at 1.3433 before the rate recovered back to the 1.3550 area in early New York; the rejection of the new nine month low argues for a floor under the market but the whipsaw argues that no one knows with confidence what to do.

USD/JPY is hovering between the 88.80 and 89.40 area with high prints at 89.39 and lows at 88.88 overnight; tech S/R appears fairly solid in this pair and traders expect continued consolidation near-term.

USD/CHF rallied hard as the greenback was lifted on whipsaw back to the 1.0900 handle with a high print at 1.0891 before reversing a full handle to the 1.0790 area in early New York; low prints in Asia at 1.0778 are under threat and if the rate makes a new low during the day a general rout would be in play as that would be the weekly high and low trading on the same day.

USD/CAD continues to grind lower; high prints at 1.0445 overnight were on low volume and the rate continued lower after breaking under 1.0400 during early Europe. Low prints at 1.0340 in early New York with little in the way of bids expected ahead of 1.0320 most desks report.

In my view, the Greenback continues to show signs of a top but it is getting harder to get positioned for a pullback. The whipsaw continues to push both sides to the sidelines and fast money types are the only ones getting a leg-up on the price action. The USD is setting up for a long-liquidation break and some one-way action but until that happens traders need to be nimble. Look for the USD to continue in whippy conditions today as conditions are thinner and news is light.

Jason Alan Jankovsky

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Trading in off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading in FOREX is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, or trade discussion are subject to change at any time.

Trade was light in Asia with the rate lifting to a high print at 1.5180 area before seeing offers from a UK clearer. Cable initially recovered off early lows around the 1.5150 area but dropped a whopping 350 points in less than an hour and a half as some desks report a combination of stops, fresh selling and some desks pulling resting bids all worked to put the rate in a free fall for a low print at 1.4781before any bids showed up.

Traders note that EURO followed the rate lower as did the other major pairs and suspect that the volatility will sideline a lot of players until the dust settles. Greek debt spreads had narrowed overnight prompting a firming in the EURO but the whipsaw seen into early New York suggests that traders on the long side are still unwilling to hold positions without further confidence that the situation is being resolved.

EURO high prints at 1.3655 found offers and as the rate dropped back to 1.3600/20 area bids were noted from semi-official names and a US investment house. Further pressure under the 1.3580 area found stops as cable dropped hard and the rate fell to a low print at 1.3509 before bouncing to the 1.3530/40 area as cable recovered a full handle off the lows.

Traders note that both the EURO and GBP are working in thinner conditions which seems to support the sidelined players theory.

USD/JPY is higher working offers at the 89.30 area with a high print at 89.38 so far in early New York; low prints at88.80 again on tech support. Traders report exporter interest around the 89.30/50 area with stops likely above; order boards are thinner with many spec accounts holding shorts confidently. Overnight equities are firmer helping the risk-on trade suggesting a bit of underlying firmness in the rate.

USD/CHF whipped around as well lifting off low prints at 1.0718 through stops above the 1.0780 area for a high print at 1.0840 before dropping back to the 1.0810/20 area. Traders note that bids were from technical players as the rate held the previous low around 1.0720 suggesting more range trade with a cap near 1.0840/50.

USD/CAD is lagging action elsewhere but is also lifting a bit as the Greenback rallies; high prints at 1.0576 are at tech resistance of 1.058 area with stops likely above the 1.0600 handle for the day. Low prints at 1.0492 met bids from profit-taking shorts some desks report suggesting that sellers are remaining quick to take gains and expect more two-way action.

In my view, the whipsaw seen in the past few hours underscores the lack of confidence that USD sellers continue to have despite seeing solid signs that the Greenback is overdone to the upside in the near-term. Technical’s suggest that the USD is at a top near-term but buyers continue to press their advantage and will likely create more whippy conditions as sellers lack conviction to hold positions with ranges of this type being seen more often. Look for more two-way action today and into US data; expect S/R to be challenged more than once.

Jason Alan Jankovsky

FOREX Analyst and Trader

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Trading in off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading in FOREX is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, or trade discussion are subject to change at any time.

Overnight Greek bond spreads tightened a bit helping to lift EURO; UK revised GDP numbers were better than expected lifting Cable but the rate is making lows now in early New York as “sell the rallies” traders take advantage of higher prices. Most analysts remain bullish on the near-term prospects for the USD but some remind that the technical picture for the Greenback is overbought and warn of a potential correction that may be triggered by better US data this morning creating a “risk-on” day for the majors.

GBP high prints at 1.5320 on UK data were turned back and fast-money longs took gains off the table quickly once the rate retreated to the 1.5250/60 area; low prints in early New York at 1.5211 but the rate is holding off the lows and some desks report semi-official names and good buyers on the dips. Stops are said to be in size under the 1.5200 handle as longs set recently have a lower tolerance for risk; upside stops are said to be in size closer to the 1.5350 area.

EURO is firm and pressing into highs overnight; high prints as Cable rallied at 1.3629 finding stops over 1.3600/10 area. Offers are said to be waiting on a lift to 1.3650 area with stops beyond; low prints a distant 1.3529 this morning. Traders report reserve manager interest on the buy side overnight as well as some sightings of sovereign names. A lift over the 1.3650 area with a close above 1.3680 area opens the door to a short-squeeze some desks warn.

USD/JPY is holding firm in a tighter range after yesterday’s sell-off; low prints at 89.03 with highs so far this morning at 89.51 and traders note large stops likely above the 89.80 area. Better equities today likely to inspire a round of short-covering as most analysts suggest the repatriation needs are mostly done for the year-end.

USD/CHF is weaker dropping to a low print overnight at 1.0736 but still holding the 1.0720/30 area of S/R; highs at 1.0819 are under S/R from recent trade suggesting that a downside move may be brewing. Traders are looking for a close under 1.0720 to signal a potential liquidation break with trade on the 1.0600 handle today a solid sign.

USD/CAD is also testing downside action with high prints at 1.0621 going offer easily; low prints in late Europe at 1.0559 and the rate is near lows to start New York. Traders note stops likely under the 1.0520/30 area with a close today under the 1.0520 area likely to encourage a liquidation break next week.

In my view, the USD is a bit “toppy” after panicky trade and risk-aversion pushed the majors lower; the important technical thing to remember is that both equities and commodities were bought off their respective liquidation lows and only a few pairs moved into new territory against the Greenback. Likely this means the USD has exhausted the upside potential near-term and if equities end on a strong note today a USD sell-off might be coming early next week. Look for US data to support stocks today putting downside pressure on the USD early.

Jason Alan Jankovsky

FOREX Analyst and Trader

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Also available my first book: Trading Rules that Work

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Trading in off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading in FOREX is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, or trade discussion are subject to change at any time.

US data is due this morning with some analysts suggesting a flat reading on Durable Goods; the bulls suggesting that the dip in equities is a buying opportunity with the bears pointing to weak data so far this week as indicative of a potential double-dip building. US Fed Chair Bernanke continues testimony on Capitol Hill today but most fed watchers expect no market-moving news. Issues over Greek sovereign debt continued with Moody’s closely monitoring a resolution but stating they see no change in their ratings for Greece at this time; other rhetoric was supportive but EURO was under pressure through reported stops.

Low prints in EURO at 1.3450 found the usual assortment of Asian CB’s on the buy side under 1.3500 traders say; macro account selling was also seen under the figure. High prints in early Asia at 1.3549 as the New York session closed weaker likely encouraged the follow-on selling pushing the EURO into key S/R overnight. Pressure from EURO spilled over into Cable with the rate dropping through several layers of support for a new nine-month low at 1.5270 before regaining the 1.5300 handle; traders note that stops were a large driver with sovereigns seen on the bid under 1.5330 most of the evening. High prints were from the New York close at 1.5424 with stops noted above 1.5380 today; offers likely ahead from the “sell rallies” crowd now that the rate has probed for a new low.

USD/JPY also was under pressure but saw good bids from large names and Japanese Lifers offsetting offers from a large US Investment house traders say; low prints at 89.19 is on long-term tech support area of 89.20/30 area. High prints after the New York close at 90.33 went unchallenged overnight; traders are wary of a short-squeeze anytime now that Yen repatriation may be winding down for the fiscal year end.

USD/CHF lifted to a high print at 1.0881 where offers capped overnight the rate easing back to the 1.0840 area into early New York; low prints at 1.0803 from New York’s close likely to be challenged today if equities lift around the news.

USD/CAD continues to hold above the 1.0500 handle with high prints at 1.0585; lows at 1.0511 on early follow-on selling into Asian trade. Traders note that the rate is likely coiling for a larger move and stops are likely building above 1.0620 area from the shorts and under 1.0480 from the bulls.

In my view, the sentiment for the Greenback is reaching into severe overbought as are most pairs. There has been little meaningful correction for the Greenback on the strength seen from late last year and traders are noting caution flags for further strength such as the record EURO futures short reported twice already. If the Greenback cannot build into further strength today a long-liquidation break may develop ahead of US data into next week. Look for more two-way trade with a corrective tone; buy the dip traders likely will be active in USD today.

Jason Alan Jankovsky

FOREX Analyst and Trader

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Currently an Amazon.com top 100 bestseller under Finance/Futures

Trading in off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading in FOREX is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, or trade discussion are subject to change at any time.