• Home ::
• Technical ::
• Forex Strategy ::
• Daily Trading Forecast

• Send
• Print
• Add To
• Rss

Daily Trading Forecast

The "D" Word

Tue, Nov 18 2008, 11:19 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG

Remember the times when the word "recession" was avoided by economists - they never projected a recession in their scenarios, only a growth slowdown. So certain polls tried to detect the "R" word, i.e. recession, in the world press, counting its appearance and creating an index, pointing to the likelihood of a coming recession. With the developed economies now in recession, another eerie spectre is rising behind the horizon - deflation. The "D" word is not yet the main theme in the world press, but several central banks are already including it in their projections for price development, even the ECB, taking a U-turn in their so far inflation-fighting policy. America is expected first to dive into negative price development next year, followed by Great Britain. That supports the idea of a stronger U.S. dollar, a conclusion of chart-technical analysis, too.

The USD is now in an 18-trading-day-old consolidation phase, without any real attempt to correct its previous strength. That encompasses the above idea of further strength of the Greenback. True, a breakout must occur soon to confirm that notion. We do not see that happening in today’s trading, although it shows a slight bid tone in these early European hours. This will last in today’s trading, as described in detail below. Note today’s release of the U.S. Producer Price Index at 14:30 CET. A further decline is expected.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The pair traded lower in early European hours and is currently priced at 1.2614. We see that selling mood continuing in today’s trading, eventually testing support at 1.2520. From there, a recovery move is likely but not above the 1.2640 level.

GBP / USD
Currently trading at 1.5005, cable is attempting to break the handle resistance at 1.5050. We don’t think it will even come near to that level and see rather another drop to the 1.4900 support level.

USD / CHF
The dollar is slowly achieving one high after another against the Swiss franc. Topping at 1.2026 in early European trading and then retreating, it is currently priced at 1.2001. We don’t see much downside risk in today’s trading and expect the old highs to be overtaken by a minor margin today.

USD / JPY
Trading near good support at 96.20, the dollar is currently priced at 96.40, on a slight downmove against the yen. We expect that support level at 96.20 to hold in today’s trading and project another upmove to the 97.00 level.

Published on  Tue, Nov 18 2008, 11:20 GMT