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Daily Trading Forecast

USD Still Defending its Major Support Lines

Wed, Oct 28 2009, 11:12 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG  |  View company's profile

Although we expect the important support lines for the USD (for instance, CHF / USD 1.000, EUR / USD 1.5050) to be broken, we must give the Greenback still some time before that materializes. Longer term, the currency is still in an oversold postion, which has to be corrected first. Accordingly, the USD is enjoying some recovery right now, in a move we expect to remain for the rest of this week.

Our outlook for today`s trading is consistent with that opinion. We therefore would profit from some further upward correction for the USD. See the details below for favorable buying points. Do not hesitate to take profits quickly, though, since it is still possible that this correction of the oversold position of the USD could result in a volatile market. Note today`s September U.S. durable goods orders at 13:30 CET, and the U.S. new home sales data for September, at 15:00 CET. Both indicators are expected to improve.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The EUR / USD continues to lose ground in early European trading and is currently priced at 1.4785. We see important support at 1.4760 which, despite lower European equity markets, should hold in today's trading. If this support is tested and holds, we would be buyers of the EUR / USD at 1.4770 or lower.

GBP / USD
Currently trading at 1.6339, this pair is not far from support at 1.6285 and major support at 1.6250. It is possible that both levels will be tested today but we are not as confident of a recovery in the pound as we are for the euro. As a consequence, we have no recommendation for this pair today.

USD / CHF
The dollar has been trending higher against the Swiss franc over the last two days and is presently priced at 1.0218. The action in the USD / CHF is much more subdued than in the other pairs and we feel that any test of support at 1.0150 would require a large rally in the U.S. equity markets.

USD / JPY
The USD / JPY is trading contrary to the other majors in that the dollar has been trending lower against the yen over the last two days. Currently priced at 90.99, we expect the dollar to trend lower today to levels around 90.20 / 90.10 in slow trading.

Published on  Wed, Oct 28 2009, 11:14 GMT