Daily Trading Forecast
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Recent Dollar Strength Seems to be Waning
Wed, May 7 2008, 10:28 GMT
by Swiss e Trade Strategy Team
The dollar mini-rally, which began last week after the Federal Reserve Fed Funds reduction of 0.25%, appears to have lost steam. Worse than expected economic figures from England and the EC this morning failed to lift the dollar against Sterling and the Euro.
The dollar was benefiting from the growing perception that the Federal Reserve has finished lowering interest rates and may even consider raising rates if inflation becomes a problem. We think traders now want further proof that this is the case. Whatever the reason is, volume and volatility have dried up as everyone awaits the next big move.
Intraday Market Outlook for Day Traders
EUR / USD
The EUR / USD appears to be entering into a consolidating range between support at 1.5360 and resistance at 1.5540, with the market currently trading at 1.5457. Stochastic and MACD studies show a continuation of lower EUR / USD rates as we’ve seen over the last week. We feel the market has yet to make up its mind, so we have no recommendation for today.
GBP / USD
The GBP / USD saw renewed selling today in early European trading due to lousy manufacturing figures from the UK. Currently, the pair is trading at 1.9583, which is below a support level we see at 1.9600. Prices may test next support at 1.9360 over the remainder of this week, although volume was very low in early morning trading today, and we may see a recovery. Recommendation: Sell the GBP / USD at prices over 1.9600 for a target of 1.9480. With possible moves lower to 1.9363, we suggest a stop at 1.9655. See chart below.
USD / CHF
We see some resistance at this morning’s high of 1.0555, with the market currently trading at 1.0545. The overall trend is upward but dollar sentiment seems to be waning somewhat today. We do not have a specific recommendation, but advise traders that if they establish a position to do so from the long side.
USD / JPY
In the 1-hour chart, the USD / JPY pair, currently trading at 105.20, shows a confirmed constructive pattern with resistance at 105.70, but we doubt that it will be broken today – not enough momentum. We have no recommendation for today.
GBP / USD Chart
Published on Wed, May 7 2008, 10:32 GMT
Archive
- Still No Change in Tight Forex Ranges after ECB's Rate Decision
Published On Fri, Jul 3 2009, 10:01 GMT - Do Not Expect Too Much of Today's ECB Rate Decision
Published On Thu, Jul 2 2009, 09:40 GMT - Forex Remains Sideways
Published On Wed, Jul 1 2009, 10:06 GMT - Major Pairs: Oversold / Overbought Does it for the Moment
Published On Tue, Jun 30 2009, 10:06 GMT - Death of the Dinosaurs
Published On Mon, Jun 29 2009, 10:05 GMT
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