High prints were only challenged once as the rate was unable to hold the In my view, the rate will likely make lows for the year soon but I expect a short-covering rally to squeeze out the late shorts first. Traders note volumes remained low despite the interest from the sell side.
Both EURO and GBP are under technical pressure now that important tech levels fell today; aggressive traders who are looking to get long should hold aside near-term and wait for the next tech level in both pairs.
Traders note that the tech picture looks more toppy in the minor pairs suggesting that the USD may trade sideways for a day or two before a pullback is attempted. In my view, a low volume rally is usually followed by a pullback of some kind but with USD sentiment still firm into the start of the year more upside may be in store; the USD has some serious resistance ahead and it would be reasonable to expect a pullback from recent highs if we return to there.
Look for the USD to follow through with more gains overnight and then a return to two-way action as cross-spreaders continue to sell GBP across the board. No sign yet of the bottom firmly in after failing to hold the 1. Cross-spreaders continue to sell GBP across the board. Spillover from EURO likely but action still technical.
Bears took a stand above the 1. Sellers likely active suggesting a dip back to potential support around the 1. Two-way and firmer action due to cross-spreaders liquidating EURO-Sterling; repatriation also lending to the firm tone. Rate two-way but falls through more stops to make a bottom under monthly support; 50 bar MA failed to offer solid support. Rally likely bids absorb offers under the 1. Sovereign offers seen into the highs last week traders say but those may be covering into the dip this week.
Technical levels around the 1. Correction lower is likely near its end, likely at a buy point on this dip to start the week but some momentum still there for lower action. Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors.
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