An uneventful day for the USD today despite the release of ADP private payroll data which came in higher-than-expected. Forecasting good news on the employment front traders took this morning’s data as a positive for the USD and lifted the Greenback to the best levels of the week so far extending gains seen yesterday.

The advance was short-lived as the majors reversed off the lows and returned to the upper end of their past 24 hour ranges; Cable holding firmly to gains over the 1.9800 handle after a low print at 1.9743. Traders report good buying from semi-official names helping to support into the end of New York.

EURO dipping down into new lows supported by Fib defense in the low 1.5500 handle; low prints at 1.5521 before bouncing into the 1.5580 area; traders suspect the worst may be over for the EURO after holding the 1.5500 handle but volumes were light on the bounce.

In my view the USD has simply extended the range near-term on late bids and will likely fall back to challenge the lows intraday again which I think will offer a buying opportunity. Technically the USD has not violated any significant S/R so far this week and more upside is possible after a corrective dip to wash out the late longs. USD/JPY and USD/CHF all traded into respective resistance making new monthly highs the past 24 hours.

USD/CHF tagged the 1.0500 handle and now looks set to drop off. Aggressive traders should be short from above the 1.0500 handle today. Yen has significant offers above the market at the 108.30/50 area and it will take a lot of effort to break the rate over the 108.50 zone. If that happens traders report a huge interest to buy the breakout and run with it as it appears that will be a significant psychological change for the rate. In my view, the USD will retreat from current pricing and sketch out a broader trading range. I don’t think the USD has the structural fundamentals for a sustained rally against the rest of the world’s currencies; although a wide trading range is likely. Look for a quiet overnight session ahead of tomorrow’s GDP data early.

Today’s US Dollar Trading

• USD extends range a bit
• Two-way action portends more correction
• Volumes moderate

Overnight Preview

• Look for a very quiet session overnight
• Waiting on US GDP tomorrow

Looking Ahead
All times EASTERN (-5 GMT)

•  8:30am USD Advance GDP q/q
•  8:30am USD Advance GDP Price Index q/q
•  8:30am USD Employment Cost Index q/q
•  8:30am USD Unemployment Claims
•  9:45am USD Chicago Business Barometer
•  10:35am USD Natural Gas Storage
•  1:00pm USD Treasury Sec Paulson Speaks

Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more details about Forex Trading and Tips for decent earnings through Forex Trading, Please check http://www.forexpros.com