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Daily Trading Forecast

Dollar Demand Remains High

Fri, Oct 24 2008, 10:17 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG

We expect this week’s high dollar demand to retreat somewhat now, although this European morning there is little sign of it. After hovering for two days above long-term support lines, the already hard-knocked euro and British pound gave way to another spectacular drop, right now in another attempt to consolidate their again lower levels. For this time of the year, the dollar is behaving with an anti-seasonal tendency. The fourth quarter, historically seen, usually shows a weak dollar after strong or stable quarters 1-3. This time it seems to be the other way around, but 2008 will probably go into history as a wicked year anyway.

In today’s trading, we expect a consolidation of the newly-reached levels, expressed in a sideways movement in the pairs within some wider ranges, still with an underlying bid tone for the USD as projected in the major pairs’ outlook below. Interesting will be the publication of U.S. existing home sales for September today at 16:00 CET, usually not much of a market mover, but the market might look eagerly for an improvement in this battered industry. A slight improvement is expected this time.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The pair came under renewed selling pressure this European morning, trading right now at a low of 1.2552. We expect at least some recovery to set in soon, bringing the pair up to 1.2650. Afterwards, a sideways move between these two marks is likely.

GBP / USD
After sharp losses in early European trading, we expect cable to consolidate its new lows. Currently trading at 1.5400, recovery moves up to 1.5680 are possible, given the higher volatility of this pair. We see the 1.5400 level as the support for today. If this level is broken, though, substantial losses can be expected.

USD / CHF
After reaching a high of 1.1748 against the Swiss franc in late Asian trading, the dollar started a countermove, losing over 150 pips. Currently trading at 1.1555, we do not see much more downward potential and rather expect a recovery up to the 1.1600 level.

USD / JPY
The dollar went into freefall against the yen this European morning, currently trading at 91.57 near the day’s lows. We expect some recovery up to 92.50 to adjust this countermove compared with other pairs in today’s trading.

Published on  Fri, Oct 24 2008, 10:19 GMT