Daily Trading Forecast

USD Recovery Continues (Slowly)

Fri, Jul 25 2008, 10:58 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG


Asian and early european trading saw the USD recover a little further versus the majors, albeit slowly. With oil prices now definitely off their peak, fresh US data showing the US economy in brighter aspects than estimated and the EURO zone`s interest rate expectations now rather on the downside we expect at least some further recovery moves for the USD.

Accordingly, in today`s trading, we prefer to buy the USD on weakness, as projected below for the majors in detail. With no relevant data releases expected for today and with rather low volatility summer trading, the below discussed support and resistance zones deserve increased attention.

Intraday Market Outlook for Day Traders

EUR/USD

The Euro started the week with an upward correction phase in asian and early european trading, currently at 1.5728. We do not see that point significantly overtaken, because it represents an important resistance zone. On the downside, the 1.5650 support will be most probably tested again today.

GBP/USD

Currently trading at 1.9860 the pair is caught in a narrow trading range with a slight downside bias. For now, recovery moves are likely, limited on the upside by resistance at 1.9900 which, when tested, would open up renewed downside potential to the support zone at 1.9850.

USD/CHF

The USD failed so far to overtake the important resistance zone at 1.0400 against the Swiss Franc, currently trading at 1.0348. We see the 1.0400 point being tested again in today`s trading, but again not broken. Volatility is simply too low for that.

USD/JPY

Currently at 107.70 against the Yen and on a good support level, we see the Dollar preparing another attack to the 108.00 resistance level, a point it failed to break so far. Even if broken today, the 108.50 level must be decisevly be overtaken on the upside as well to project new higher territory.

Published on  Mon, Jul 28 2008, 10:24 GMT

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