Daily Trading Forecast

Major Pairs in Unbroken Sideways Trend

Thu, Aug 21 2008, 10:20 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG


For five days now, the dollar has just been oscillating within its narrow trading range and once again only tested the lower limit of this range in early European trading. Although eventually a breakout on either side will occur, we do not expect that to be the case today, and rather forecast another upmove for the dollar within the limits discussed below.

The reaction this morning to the UK’s better-than-expected retail sales - the pound quickly gained some ground at the data release - shows an increased alertness of the markets to any hint that could be worth anything in showing a new direction: either a decisive downward correction in the dollar`s bull phase or a decisive revival of the bull’s vigor. Note today’s U.S. data release of the weekly initial jobless claims at 14:30 CET and U.S. leading indicators for July at 16:00 CET.

Intraday Market Outlook for Day Traders

EUR / USD
The EUR / USD is working hard to break the upper limit of the trading range between 1.4650 and current levels at 1.4780. We expect the market to fall back again from these levels, trading once more towards the lower limit.

GBP / USD
The resistance level at 1.8700, currently under attack with the market at 1.8693, will be very hard to break. We do not expect this to happen today and see a reversal to the downside, trading towards 1.8600.

USD / CHF
In an established sideways trend between roughly 1.1000 on the upper side and 1.0900 on the lower side, the dollar has just tested its support at 1.0915 but failed to break it, and is currently trading at 1.0947. We see the present bid tone continuing in today’s trading, until the 1.1000 handle is on the test again.

USD / JPY
Remarkably lower in late Asian trading, the dollar has just found its support zone at 108.70. Currently at 108.84 in slow upward trading, we expect the 109.50 resistance level to be tested today, but not broken.

Published on  Thu, Aug 21 2008, 10:20 GMT

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