The weekend’s close was overshadowed by worsening data for the economic environment in the Eurozone, especially by Germany’s important export figures now showing that the Export Champion has suffered a blow. Accordingly, the market expects the ECB to cut interest rates decisively this time (this coming Thursday), bringing the euro under pressure. Yes, the ECB will cut again, but we doubt it will be larger than just another 50 basis points. The institution’s members have made statements several times against a too rapid interest decline in this financial / economic crisis.

For today’s trading, we are looking for an opportunity to short the EUR / USD pair at prices above the present market. See further details for the major pairs below. Trading actions should wait until more is known about today’s BIS press conference in Basel at 13:30 CET about the G-10 central bankers’ meeting.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
After tending weaker in early European trading hours, the pair is heavily oversold right now, priced at 1.3370. We see rather a recovery now setting in, which could lead up to resistance around 1.3500 during the day. Prices above 1.3500 would be a selling opportunity.

GBP / USD
The pair is trading now in a solid support zone ranging between 1.4900 and current prices at 1.4955. We expect recovery moves in today’s trading, up to 1.5090, which we would use as another selling point leading back to the mentioned support zone.

USD / CHF
The dollar is about to test the resistance zone for today at 1.1250, currently trading at 1.1214 against the Swiss franc in this European morning. We expect that resistance at 1.1250 to hold in today’s trading and see setbacks from there to support at 1.1120.

USD / JPY
A bout of weakness has sent the dollar back to its longer-term support zone around 90.00 in late Asian trading. Currently at 90.11 in European morning trading, we expect some recovery to set in later today, but not above prices around 91.20.