Daily Trading Forecast

Not Much Expected in Today's Trading

Fri, May 9 2008, 10:28 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG


Yesterday's Trichet-led Euro rally sparked rallies in other currencies as well, with the exception of the yen which had already begun to climb against the dollar in Asian trading. Today, we expect the dollar to recover some of the ground it lost in yesterday's trading due to its oversold position and due to the fact that many traders close their open positions before a weekend.

The U.S. Trade Balance report due at 14:30 CET may lend some support to the dollar if it comes out better than the -61.40 billion forecast. For the rest of the day, we don't see the chance of much action.

Intraday Market Outlook for Day Traders

EUR / USD
The Trichet rally in the EUR / USD continued through Asian and this morning’s early European trading. Currently, the EUR / USD is trading at 1.5460 which is now, according to most measurements, in overbought territory. The U.S. trade balance figure this afternoon probably won’t have much influence on the dollar unless it comes in much better than expected. In this case, the EUR / USD should sell off to its next support, which is located at 1.5390. We have no forecast for today.

GBP / USD
The British pound continues to be the weakest major currency against the dollar and is currently trading at 1.9520, around its mid-levels from yesterday. Like the EUR / USD, the GBP / USD also benefited from Trichet’s remarks yesterday and rallied to a high of 1.9621 but fell back to current levels during Asian trading. Trading should be slow in the GBP / USD today as there has been no news out from England and, as it’s Friday, many traders will be closing positions for the weekend. We see strong support at 1.9500 and expect this to hold today. We also have no forecast today for the GBP / USD.

USD / CHF
The USD / CHF is currently trading at 1.0430, close to a very important support level at 1.0410. The USD / CHF pair is currently oversold and, if this support level is broken, prices will quickly reach next support at 1.0300, although we don’t expect this to happen today. No forecast for today.

USD / JPY
The USD / JPY, currently trading at 102.90, is, like the USD /CHF, hovering over an important support level located at 102.70. Also like the USD / CHF, the USD / JPY is currently oversold and we’re not expecting much from it today. Again, we have no forecast.

Published on  Fri, May 9 2008, 10:29 GMT

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