Forexpros Daily Analysis - Morning session - GMT

Today’s US Dollar Trading
 
• USD two-sided, ends mixed in quiet trade
• Early close makes for dead volumes
• More upside for the USD likely

Overnight Preview

• Most markets closed Friday
• FOREX likely to be really quiet

Looking Ahead

• All US markets back on Monday
• Easter weekend

Summary
For the most part the USD followed through from Wednesday’s rally, trading higher most of the day against the majors but ending mixed as low volumes and poor liquidity likely exaggerated moves. Today’s Philly Fed data was slightly better than forecast but still showing signs of slowdown and possible recession but that was largely overshadowed by trader concerns over the liquidity “crisis” and long-liquidation in the majors. Mostly stops drove early Asian and European trade but by the time the New York session opened the USD had seen the best levels of the day against most pairs; only rallying to new highs against EURO as enthusiasm wanes for potential new highs. All the majors have put in solid reversal patterns and traders expect more to the upside for the USD as general sentiment begins to soften on the bearish side; some even speculating that the worst in the “crisis” is over and there is new life for the Greenback ahead. On the day, Cable made high prints at 1.9879 overnight and lows in Europe at 1.9733 but firmed into the early close to hold the 1.9800 handle; traders note the 50 bar MA is offering a potential bounce. Aggressive traders can look to add to open shorts on a further bounce to the 1.9900 area looking for resistance to hold at the 1.9950 area of broken support. Further declines and a new low for the month are in the works I think. EURO fell through important support today initially finding stops at 1.5550 area after attempting to rally overnight. High prints at 1.5652 were offered by a German name traders say and stops were from older longs. The slide continued into more stops at 1.5520/30, 1.5500, and 1.5480 for a low print at 1.5433 initially. More selling weakened the rate during the day and lows around the London Fix came in at 1.5395; no doubt breaking a few hearts for the “buy the dip” crowd. USD/JPY firmed to the 100.00 handle again but was unable to hold gains. Selling was mostly stops traders say and the drop to the lows at 98.44 was probably exaggerated due to the thin conditions. Traders expect more upside next week. Have a great weekend—see you Monday.

EURO/USD Daily

R3:  1.5550
R2:  1.5520/30
R1:  1.5480
Current Price: 1.5447
S1:  1.5400/10
S2:  1.5330/40
S3:  1.5300

Rate safely through the important support area of the 1.5480 area as stops lighten the long position amid thin conditions. Traders note that the rate is probably going to correct back to the breakout area in the 1.4990 area as the “wait and see” crowd represents some big names at this point; potentially a lot of buying pressure could be sidelined near-term. Aggressive shorts can add to open positions on a close under the 1.5340 area in my view, USD due to consolidate further in my view.

USD/JPY Daily

R3:  100.00/10
R2:  99.80
R1:  99.50
Current Price:  99.21
S1:  98.80
S2:  98.50
S3:  98.20/30

Rate higher on the day but close under the 100.00 handle again a caution to the bulls. Lots of bearish sentiment still out there but the shorts are certainly nervous into the end of the week. Philly fed a bit of positive news but overshadowed by other concerns. Look for downside pressure to be bought on a break under the 98.20/30 area but stops a risk ahead of there due to nervous longs. Long wick today needs to see bids tomorrow or could be a signal for lower prices.