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Although the U.S. dollar opened the NY session on a stronger footing, it remains very weak.  All of the major currency pairs such as the EUR/USD and GBP/USD are trading near their year to date highs.  However based upon the weekly Commitment of Traders report, speculators have been very short dollars and the lack of buyers on the sidelines is preventing the EUR/USD from staging a meaningful break above 1.40.  We still believe that the currency pair will break above that level in the near future.  

Existing home sales is the only piece of meaningful U.S. economic data on the calendar today.  As we mentioned in our Daily Currency Focus yesterday, in order to move homes in the current market environment, prices need to drop.  This was exactly what happened with existing home sales rising 2.9 percent in April but median prices falling 15 percent year over year.  We are worried about the sharp decline in mortgage applications last week but the report can be volatile.  New home sales should also rise but once again, the transactions will be at lower prices.  The dollar shrugged off the existing home sales report as the momentum in the greenback's slide declines. 

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About The Author

Kathy Lien began her FX trading career 10 years ago at J.P. Morgan Chase. After graduating New York University’s Leonard Stern School of Business at the age of 18, Kathy joined the bank's interbank FX trading desk and eventually moved to the cross markets proprietary trading desk. In the interbank market, her ability to create solid fundamental and technical analysis from the myriad of information on the market helped her trade forex spot and options. Her experience eventually led her to be chief strategist at Daily FX where she worked until she joined GFT in 2008.

With her knowledge of forex, as well as her experience trading other products, such as interest rate derivates, bonds, equities, and futures, Lien has built a reputation as an international currency analyst. She is frequently quoted on CNBC, Bloomberg, Fox Business and Reuters. Lien has also written for publications like Active Trader, Futures, and SFO magazine. She is the author of the newly updated Day Trading the Currency Market: Technical and Fundamental Strategies to Profit from Market Moves, and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Boris Schlossberg.

To buy Kathy’s newly updated Day Trading and Swing Trading the Currency Market: Technical and Fundamental Strategies to Profit from Market Moves, click here.