Daily Trading Forecast

Greenback Bobs Up

Mon, Jul 7 2008, 10:13 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG


The week started with a strong note for the USD in the majors, mainly influenced by last week’s absence of a further clue to the Euro interest rate future development, after the expected interest rate increase. The new up direction of the U.S. currency may well last longer, although this movement must be seen in its limits first, i.e. the old broad trading range that started in March 2008, as visible in the daily charts.

Our fine tuning for today’s trading, as outlined in detail below, concentrates on buying on weakness. With the absence of influencing news for today, and the current overbought situation for the USD, we prefer to see downward correction moves before entering new longs.

Intraday Market Outlook for Day Traders

EUR / USD
The EUR / USD pair, currently at 1.5620, will most likely continue its weakness in today’s trading. For a short trade, we would wait for a correction upwards now and sell above 1.5660, with a target of 1.5550. Stop at 1.5700. See chart below.

GBP / USD
The GBP / USD experienced another bout of weakness in early European trading. Currently at 1.9690, the pair is running into its broader support zone between current prices and a lower end at 1.9600. We do not expect this support zone to be broken today. Right now, because of the oversold situation, a correction move upwards is likely before a renewed bearish mood sets in again.

USD / CHF
Against the Swiss franc, the U.S. dollar, currently at 1.0325, may have just completed another upward leg, away from its longer term support at approximately 1.0150. We expect the next resistance zone between 1.0340 and 1.0470 to be broken as well, however, not in today’s trading since currently the pair is trading in overbought condition already.

USD / JPY
The USD / JPY resumed its previous strength, running soon into resistance between 107.70 and 108.20. A breeak of this zone would carry the pair even higher, confirming the uptrend since March 2008. Currently at 107.68 and overbought, we expect only some consolidation trading for today.

EUR / USD Chart

EUR / USD

Published on  Mon, Jul 7 2008, 10:25 GMT

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