The summer recovery of the Greenback came to a halt yesterday after the release of the Fed’s current monetary policy. It was not that the latter revealed anything new - the Fed intends to keep current interest rates at 2% - it was what the market has read into the wording, i.e. some concerns that the monetary policy could be too lax. Anyway, the dollar was ready to take a breather in its recovery move, considering the now overbought situation.

In late Asian and early European trading, the majors more or less reflected the consolidation/correction in the upward movement. See details below for today’s trading. The markets are awaiting tomorrow’s BoE and ECB statements on monetary policy and, with no important data releases today, we expect a fairly quiet market.

Intraday Market Outlook for Day Traders

EUR / USD
The EUR / USD, currently at 1.5476 and back from its recovery in Asian and European trading, is on the move to test the 1.5450 level again. We doubt that this level will be decisively broken today and rather see a range of approximately 1.5450 to 1.5500.

GBP / USD
Consolidation is moving on for the GBP / USD, now trading at 1.9540 and entering the major support zone between current prices and 1.9450. Due to the still oversold position, we see a higher trading range, though, between 1.9530 and 1.9570 for today.

USD / CHF
The U.S. dollar tried hard again to break the important 1.0550 level against the Swiss franc but so far failed to do so and is currently trading at 1.0521. The trading range we see for today is narrow, with support at 1.0500 and resistance at 1.0540.

USD / JPY
After another fierce attack on the resistance line at 108.50 in early European trading, the dollar was successful this time, overriding this important level against the yen. This level is now support, which we expect to hold in today’s trading. The pair is currently trading at 108.56.