It 's not only the outlook on shrinking interest rate differentials between the euro and the USD that puts pressure on the euro: Weak stock markets, influenced by bad news again from the financial sector ignited some flight to the Greenback, considered now as the saver haven, the same as with the yen, now the strongest currency. The euro, moving these days into a broader support zone against the dollar, could reach its old lows around 1.2400 of November last year again, should the present stock market weakness prevail.

But first we look an the EUR / USD 1.2600 handle level, which could be tested this week. Based on the quite overbought condition of the USD, we do not anticipate much more strength for the USD today, rather a consolidation between ranges defined below. There are no scheduled market-moving fundamental data today

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The pair recovered in early European trading, currently priced at 1.2935. We do not see yesterday’s low support point at 1.2850 being tested again, but expect some weakness first in today’s trading. Then another recovery attempt can set in, leading to resistance for today at 1.2980.

GBP / USD
Cable is in a pronounced downtrend for three days now, trading as low as 1.3750 in this European morning. Currently in a slight recovery move and at 1.3805 now, we expect some more recovery to come today, eventually testing the 1.3950 resistance level.

USD / CHF
Trading as high as 1.1507 in early European hours, the dollar has now retreated to the current 1.1410 against the Swiss franc. We see more of that down correction coming, testing the 1.1360 level, before a swing market between that price and 1.1450 will set in.

USD / JPY
Trading on today’s intermediate support, the dollar is currently priced at 89.85 against the yen. A recovery in today’s trading will meet resistance at 90.20, from where further weakness can set in, breaking the 89.80 support zone.