Daily Trading Forecast

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Dollar Stalled Within Tight Ranges

Fri, May 16 2008, 10:33 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG


Movement of the U.S. dollar against the majors has narrowed today to trade within tight ranges. Against the Euro, the dollar remains between 1.5420 and 1.5520 and, against Sterling, prices are stuck between 1.9450 and 1.9525. Traders are waiting for the important U.S. housing report due out at 14:30 CET and the Michigan Consumer Confidence report at 16:00 CET.

We do not anticipate any major movement today, though, as the market digests conflicting views for the dollar's future and waits for a clearer picture to develop. For detailed forecasts by currency pair, please see the reports below.

Intraday Market Outlook for Day Traders

EUR / USD
The EUR / USD is currently trading at 1.5509, having recovered from its overnight low in late New York trading at 1.5418. the rising crude oil price has been given as the reason for the EUR / USD rise this morning and, according to our charts, the EUR / USD is trading near an important resistance level at 1.5535. We feel this level can hold in today’s trading, prior to the housing report coming out of the U.S. today, which is the market’s main focus. On the other side, support comes in at 1.5447 which, if the housing figures are not too bad today, may be tested in today’s trading. We want to see a breakout at the support or resistance level before making a forecast.

GBP / USD
The GBP / USD is currently trading at 1.9490, after having gained in yesterday’s trading from a low of 1.9452. We see buy stops located over the 1.9550 level and, if these are triggered, prices could easily go up to the1.9635 resistance level. Of all the major currencies, Sterling remains the weakest against the dollar and we feel it’s only a matter of time before major support at 1.9335 is tested and broken but we do not see this happening in today’s trading. No forecast for today.

USD / CHF
A doubletop formation has formed in the USD / CHF hourly charts around the 1.6000 handle. The currency pair is currently trading at 1.0541. The general trend still remains upward for the USD / CHF, but the doubletop we see in the hourly chart worries us. No forecast for today.

USD / JPY
The USD / JPY is currently trading at 104.64 as upside momentum in the pair has stalled and we see possible weakness to perhaps the 104.00 level. But the USD / JPY has always been a difficult call and we have no forecast for today.

EUR / JPY
The EUR / JPY is currently trading at 161.90, having come down from resistance we see at 163.00. The pair has declined since the EUR / JPY’s runup to the 165.00 level on April 23. Our forecast is to sell the EUR / JPY at 162.25 or over for a target of 161.50 with a stop at 162.55. See chart below.

EUR / JPY Chart


EUR / JPY

Published on  Fri, May 16 2008, 10:40 GMT


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