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Daily Trading Forecast

After G20 − Back To The Basics

Fri, Apr 3 2009, 09:50 GMT
by Swiss e Trade Strategy Team

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The most important outcome of the G20 summit was the unaminous vote to provide unprecedented sums of money to the IMF and the World Bank. As to financial regulations, the U.S. authorities have just eased balance sheet rules for banks - while the summit discussed tougher regulations for non-bank entities and hedge funds. In any case, financial markets reacted very positively to the G20 conclusion, with world equity markets rising hand-in-hand. The USD lost territory, remaining faithful to its present inverse correlation with world stock market movements.

We expect that momentum to remain in today’s market, i.e. the USD prone to lose some more territory, as described in the major pair projections below. An interruption of that trend can happen at 14:30 CET, when U.S. non-farm payrolls for March are published. Expected is a further increase to the unemployed figures by 670,000.

Intraday Market Outlook for Day Traders

EUR / USD
After its recovery yesterday and in Asian trading, the pair is about to consolidate its gains in the early European market, moving currently around the 1.3450 mark. We expect more of this recovery move to come in today’s trading, but not exceeding the 1.3540 level.

GBP / USD
Cable jumped in early European trading, breaking the 1.4750 resistance level and reaching 1.4830 but then returning to current prices at 1.4758. We see some downward correction setting in soon, but expect the 1.4750 level to more or less hold today. Further upward moves are in the cards then, reaching prices above 1.4800.

USD / CHF
The dollar is consolidating its lower levels against the Swiss franc in quiet trading this European morning and is currently priced at 1.1340. We expect lower levels to be seen in today’s market, but not below 1.1280.

USD / JPY
The sideways market established in Asian trading for the dollar against the yen seems to be continuing in European morning trading. Currently priced at 99.90 and near to the still-unbroken resistance at 100.00. We do not expect this upper end of the trading range to be broken today. A downmove from here is likely, testing the 99.30 level.

Published on  Fri, Apr 3 2009, 09:51 GMT