Traders report moderate volumes - Evening Session - GMT

Overnight Asia/Europe
• USD two-way but firmer after early dip
• No real news available to drive trade
• Traders report moderate volumes

Today’s Economic Reports
All times EASTERN (-5 GMT)
• NONE in the US

Looking Ahead to Monday
All times EASTERN (-5 GMT)
• 10:00am USD Leading Index m/m
Almost no data anywhere so expect technical trade all day to start the week.

Summary
The Greenback was modestly lower to start overnight in Asia but despite solid demand for EURO and Yen crosses the USD is mixed-to-firmer to start New York. Traders note Asian names and Russian names on the bid for EURO during the European session Friday and dips were bought with good volumes but the rate is under pressure to start New York. With a light economic calendar today (no real news) traders are expecting the USD to remain range-bound for the day; a rotation lower by the USD is not out of the question but with good buying seen in the majors being absorbed this morning it would seem less likely that the USD will weaken through the day. Recent focus on Oil and Equities may pressure the USD a bit today if Oil firms or if Equities slide but sentiment to end the week in those markets appears to be USD favorable at the start of US trade. EURO is mid-range to start the NY session; high prints overnight at 1.5888 were in-range for yesterday as were lows at 1.5821; traders expect stops under the 1.5800/1.5780 area to be growing. Cable high prints in Asia at 2.0042; again pressured at the 2.0050 area with no bids above. Stops were elected under the 1.9950 area again overnight and this time a low print at 1.9904 gave the bulls a reason to lighten up. GBP is under pressure on the crosses with GBP/JPY higher overnight. Despite demand for Yen across most pairs the USD/JPY is firm at 106.60 area after a brief dip to 105.96 was bought by Asian names; traders note volumes in the rate only moderate overnight and expect any challenge of the 200 bar MA coming in around the 107.15/20 area today to be sold aggressively; although some desks report stops on the other side. Loonie is stuck in range but firmer and a solid high at 1.0081 is at technical resistance with stops noted beyond. I think that with all things considered the USD is about ready to make a brief show for stops above weekly highs soon. I doubt today is the day as it is Friday but next week and early stop-driven rally to the next level of resistance most likely will provide a selling opportunity. Aggressive traders can ADD to open shorts in GBP and EURO over the weekend and look to cove on the expected dip Monday or Tuesday. 

GBP/USD Daily
Resistance 3:  2.0100
Resistance 2:  2.0080
Resistance 1:  2.0050
Latest New York: 1.9945
Support 1:  1.9900/10
Support 2:  1.9880
Support 3:  1.9840/50

Comments
Rate still trapped inside range, tracking EURO as expected but unable to break out either way yet. Hold shorts; look to add on further weakness below the 200 bar MA. Bids under the 1.9950 area supported twice but price has returned suggesting offers are getting thicker. Offers from large names traders say; if 1.9950 fails it could be a big drop. Traders expect GBP to track EURO through this week. Traders expect a top to form as the rate had thinner volume on the rally last week into the reported option defense so far this week. Continue to expect a lot of cross-trading. Rate at technical resistance. Stops likely under the 1.9950 may overcome bids ahead.

Data due Monday: All times EASTERN (-5 GMT)

NONE

EURO/USD Daily
 
Resistance 3:  1.5980
Resistance 2:  1.5950
Resistance 1:  1.5890/1.5900
Latest New York:  1.5832
Support 1:  1.5800/10
Support 2:  1.5750
Support 3:  1.5720

Comments

Rate has “doji” star potential point of indecision; a drop likely to draw long-liquidation. Rate two-way and has a lot of volatility; need a close under the 1.5800 area to hold shorts and add to them. Stops under the 1.5800 area likely in size; expect a sharp break and a close under the 1.5800 area. Lack of downside follow-through a caution to the bears. Large names on the offer reported into the highs, look for a top to form. If crude lower to end the day today expect a sympathy drop also. Major support at the 1.5580 area and slightly below. The 50 bar MA likely to offer support should the rate fall back; bids will likely be in the 1.5580 area or so on any meaningful correction; which is a long way away at this point. Exponential reversal still valid.  
 
Data due Monday: All times EASTERN (-5 GMT)
NONE

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