DowntownForex

USD STEADY, UNCHANGED INTO NEW YORK

By Core Financial Group – The USD is about unchanged in early New York after a quiet two-way overnight session that saw tighter ranges in most pairs with a few new highs in the USD against some pairs. Overnight news was light but USD-positive and technical factors appeared to be the main focus as the European session opened; UK CBI Manufacturing Orders were lower but optimism was better putting a bit of downside to the GBP. The BOE minutes showed a 9-0 unanimous vote to leave policy unchanged signaling a delay in the end of QE from the BOE. Traders note that the GBP was under pressure starting in Asia with the crosses all pulling back in Tokyo; the rate remained two-way and within existing ranges for the most part. High prints at 1.6464 with lows at 1.6309 as stops under the 1.6340/50 were triggered; traders note large names on both sides of the market with some reserve manager bids seen. EURO is hovering in the 1.4200 area after probing back to lows at 1.4168; traders note stops likely building in the 1.4150 area with bids ahead. High prints at 1.4228 making for a tight range so far today with pressure seen from a Dutch name above the 1.4220 area some desks report.

EURO is likely to find stops above the market near the 1.4280 area suggesting a spike higher might extend the range but offers are said to be resting in that area also leaving the rate likely biased to the downside for the day. USD/JPY low prints at 93.22 narrowly missing stops said to be resting in the 93.20 area with bids seen from official names traders say; high prints at 93.83 continue to keep the rate on the defense as exporters are aggressive on the approach to the 94.00 handle traders say. Likely the rate will see additional pressure should equities take a tumble today with CTA-stops from recently set longs likely under the 93.00 handle; those orders possibly accelerating a move. USD/CHF remains softer but well bid on the 1.0600 handle; low prints at 1.0658 are above the 1.0620/30 area of long-term support with highs at 1.0712. Upside resistance appears firm at 1.0720 area with stops from late shorts likely in the 1.0730 area or so; traders note the rate is not attracting large offers after the sharp break earlier suggesting the sellers are taking a break and not pressing their advantage today. USD/CAD is also firm and two-way between tech S/R; high prints at 1.1091 with lows at 1.1032 making for an inside range day with higher action. Traders note that rhetoric from the BOC yesterday suggests a possible verbal-intervention play may develop and that may be keeping the shorts on their toes. Likely stops are in the 1.1120/30 area from late shorts. In my view, a weaker equities market today will be needed to break the USD out of the recent consolidation as the majors continue to focus on earnings more closely. Apparently, FOREX traders feel that capital is about to flow out of cash and back into risk investments at a rate that will pressure the USD lower but they are wary of an equities pullback that might suggests a return to lower levels in Stocks; Oil on the rise is also a USD negative but the Greenback is not in new territory yet suggesting that we are in a wide trading range with a rally due off the lows. Look for more two-way action and a slight USD gain today.

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