The latest bad economic data in the Eurozone, especially the sharply declining German export figures, ignited the current euro weakness a few days ago, leaving the markets under the impression the ECB will be alarmed this time, cutting interest rates more aggressively today, and committing itself to more cuts in the future. But what happened with the British pound a week ago, developing a rare intermediate strength against the USD upon remarks by the BoE of not cutting rates further, can very well happen with the euro today. The ECB’s head Mr. Trichet, in his remarks today, has only to not mention "cutting more if needed."
Accordingly, we are sailing a defensive course in today’s market, well aware of the buy stops built in the EUR / USD pair above the market. The mass of stops lying around the 1.3240 level. If hit, a rally up to 1.3480 is on the cards today. See below the details of our projected ranges in the major pairs. At 13.45 CET, the ECB’s rate decision is to be published. Note the perhaps equally important U.S. Producer Price Index at 14:30 CET for December, possibly providing a clue for possible future deflation (so far it is only disinflation).
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Ahead of the ECB’s interest rate decision today, the pair continues to trade in very low volatility in a narrow sideways trading range. The expected 50 basis point interest rate cut is well discounted now by the market, and we see a massive buy stop zone above 1.3240. If hit, the market could well rally to the 1.3390 level. Only prices above that level are worth selling today.
GBP / USD
Cable continued its moderate recovery movement in early European trading and is currently at 1.4595. We see more of that recovery in today’s trading, testing the 1.4650 resistance level, although in low volatility, and most probably not breaking that level.
USD / CHF
We expect a similar development to the EUR / USD in the USD / CHF pair today, that is, a probable break of the lower support at 1.1150 of the narrow trading range we are in right now. That would lead to prices below 1.1050 in today’s trading.
USD / JPY
The dollar continues to trade in very low volatility against the yen in European morning trading and is currently priced at 88.95. We see not much of a change in the narrow
Accordingly, we are sailing a defensive course in today’s market, well aware of the buy stops built in the EUR / USD pair above the market. The mass of stops lying around the 1.3240 level. If hit, a rally up to 1.3480 is on the cards today. See below the details of our projected ranges in the major pairs. At 13.45 CET, the ECB’s rate decision is to be published. Note the perhaps equally important U.S. Producer Price Index at 14:30 CET for December, possibly providing a clue for possible future deflation (so far it is only disinflation).
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Ahead of the ECB’s interest rate decision today, the pair continues to trade in very low volatility in a narrow sideways trading range. The expected 50 basis point interest rate cut is well discounted now by the market, and we see a massive buy stop zone above 1.3240. If hit, the market could well rally to the 1.3390 level. Only prices above that level are worth selling today.
GBP / USD
Cable continued its moderate recovery movement in early European trading and is currently at 1.4595. We see more of that recovery in today’s trading, testing the 1.4650 resistance level, although in low volatility, and most probably not breaking that level.
USD / CHF
We expect a similar development to the EUR / USD in the USD / CHF pair today, that is, a probable break of the lower support at 1.1150 of the narrow trading range we are in right now. That would lead to prices below 1.1050 in today’s trading.
USD / JPY
The dollar continues to trade in very low volatility against the yen in European morning trading and is currently priced at 88.95. We see not much of a change in the narrow
