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Daily Trading Forecast

Dollar to Lose Some Territory Today

Wed, Jun 24 2009, 10:03 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG  |  View company's profile

Ahead of today‘s publication of the U.S. Federal Open Market Committee meeting, the dollar is trading weaker again in this European morning. Not so much in expectation that the interest rate will be lowered by the Fed again - it will be the statement the Fed will give concerning their "quantitative easing" (printing money) and their buying troubled assets. Signs of economic recovery in the U.S. will probably be mentioned, but nothing yet in the Eurozone. That will signal that the ECB‘s job now is to do what the Americans have done long before: pushing up the bond markets to lower rates in the market. That would suck more money into the euro, lured by short-term capital gains, but not by the expected yield, of course.

The Greenback already lost more ground, within such aspects, this European morning. However the currency is in an oversold market condition right now. We therefore advocate not entering any more short positions right now. Below are our preferred entry points for an engagement in the major pairs. Best is to await the publication of U.S. durable goods orders at 14:30 CET and, after some short successful trades later, again awaiting the FOMC publication at 20:15 CET.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
Defending its higher positions in early European trading, the pair is currently priced at 1.4105. We expect some consolidation to continue, but later another rise to the 1.41400 level, most probably exceeding it eventually.

GBP / USD
Cable is in a clear uptrend this European morning, trying in high volatility to exceed the 1.6600 handle resistance and currently trading at 1.6590. We see some downward corrections emerging in today’s trading, but not going below 1.6480. From there, further upmoves are in the cards, leading to a maximum of 1.6650 for today.

USD / CHF
A weak market for the dollar against the Swiss franc is consolidating its lower levels, currently priced at 1.0650. After some recovery moves setting in soon, we see more of the weakness in this market coming, bringing it to a maximum low of 1.0590 today.

USD / JPY
After dull Asian trading hours, the dollar is hovering right now above its longer-term support at 95.00 against the yen and is currently trading at 95.12. We expect the market to develop upward steam later in today’s trading, testing the 95.80 level.

Published on  Wed, Jun 24 2009, 10:04 GMT