The Greenback is holding itself back in correcting its long-term overbought situation against the majors, but that phase clearly began last week. With financial markets no longer in a funk and credit markets hopefully working properly soon, the sometimes ridiculous spreads in Forex could normalize as well. With that in mind, one could now concentrate more on economic news, where soon a discussion could evolve on which economy on either side of the pond will revive first from its slump.

We expect a continued downward correction in today’s trading, with more solid support zones showing up as described in the pair outlook below. Today again, there are no market-moving data releases scheduled.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
Even today’s bad German ZEW numbers did not have much influence on the EUR / USD, which is now near a solid support zone at 1.3610, currently trading at 1.3670. We see 1.3610 being tested again in today’s trading, which will open upside potential to 1.3760.

GBP / USD
Cable is continuing its uptrend against the dollar, trading now near the high of 1.7567 in European trading. We expect this trend to continue in today’s trading, eventually testing but not breaking the 1.7655 resistance level.

USD / CHF
The dollar is caught in a trading range against the Swiss franc, between 1.1400 on the upside and 1.1250 at the lower end, now trading at 1.1329. We do not expect the upside to be tested again today, rather that the downside towards the level at 1.1250 will first be tried today and then broken in later trading.

USD / JPY
Trading up to a high of 103.06 against the yen in Asian trading, the dollar receded only slightly to 102.30 so far in early European hours and is currently at 102.22. We see more selling coming into the market today and later the downside support at 101.20 being tested.