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Daily Trading Forecast

Dollar Stable in Lower Volatility

Wed, Nov 19 2008, 10:58 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG

Viewed from a seasonal aspect, the stability of the Greenback is astonishing. This time of the year it usually tends to weakness as year-end approaches. But market and technical factors speak a quite different language now, leading to the opposite conclusion. Although the present consolidation phase might go on for a while, it looks like the USD is preparing itself for another leap soon. But it needs a trigger for that, which we expect to be found soon in the fundamental data either from the U.S. or Europe. There is a quite a lot of market moving data scheduled for today in the U.S. as noted below - the last for this week, which will be otherwise quiet.

For today, we advocate a buy-on-weakness approach for the USD in the major pairs, with the favorable points described in the outlook for day traders below. Avoid having positions when today’s important triple data is released at 14:30 CET: U.S. housing starts, building permits and consumer prices.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
We expect the slight selling tone for the pair to remain in today’s trading. With the EUR / USD currently priced at 1.2610, we prefer to sell above the present market, at 1.2650, while envisaging a low for today at 1.2550.

GBP / USD
With unusual stability, cable continues to trade in a very narrow trading range this European morning and is currently priced at 1.4955. We expect the higher end of the trading range at 1.4990 to be tested again today but not broken and the lower end at 1.4900 to eventually be broken on the downside later.

USD / CHF
Topping at 1.2084 in early European trading, the dollar is currently priced at 1.2074 against the Swiss franc. We expect the bid tone of yesterday and today to continue but prefer not to buy above 1.2050.

USD / JPY
The dollar stabilized further in Asian and early European trading and is currently in a slight upmove against the yen, now priced at 96.80. We see that upmove continuing today, eventually testing the 97.40 resistance zone.

Published on  Wed, Nov 19 2008, 10:59 GMT