After a firmer start the USD has given back some of its gains today after minor US data failed to inspire further gains; technical factors also likely helped the majors stay the course of further erosion. Despite recent weakness the majors were able to stage an intraday rally during the New York session and close well off their lows after making highs during the day after the London fix today. Although a reversal is not quite underway the signs that the USD rally may at least take a pause during the next 24 hours are beginning to show. Cable rallied off the European lows for a high print at 1.7842 before sellers capped the move. Traders note a potential short squeeze could develop should new highs happen during the next day or two. EURO rallied as well for a high print at 1.4533 before sellers capped the move but the same result is possible should a rally extend past the 1.4550 area traders say. Although no major factors could support today’s action most analysts are suggesting that oversold conditions may result in a relief rally near-term. USD/JPY fell on stops for a low print at 108.09 and failed to attract additional buying on the dip ending the day near the lows and possibly in position to challenge the weekly lows around the 107.70 area. USD/CAD broke back as well printing a low print after the BOC rate announcement at 1.0576 drawing an additional reversal signal from the toolbox; traders note that unless the rate can manage another high above today’s high this week the rate has likely put in a double-top on the longer term charts. Swissy also reversed during the day making the USD a coordinated move lower across all the major pairs. In my view, the USD is overdue for a corrective rally and depending on the quality of that rally it might be resuming the overall longer-term bearish scenario. I would look for a net-lower overnight session in Asia tonight and with a lot of potentially bearish data due during the US session tomorrow it is likely that the USD will end lower on the week from here.

Analysis Provided by: Forexpros.com - Written by Jason Van Jankovsky