Changing fundamental views are always present in Forex, where it is much harder to analyze this or that movement than in equity or bond markets. The latest is the now often-cited correlation between the dollar and the stock market insofar as the USD is now appreciated as a "safe haven" or benefits from "risk aversion" when stocks are tumbling. The U.S. always entered recession first and is first out of it. Since stockmarkets look forward by approximately 6 months, it is essential what the U.S. market is doing. If it continues to decline, it means that the U.S. economic recovery will be delayed, and Europe’s economy even farther away from recovery. This nourishes more expectations for much deeper interest rate cuts in the Eurozone and is therefore euro weakness, not a specific reason for the USD to gain "safe haven" status.
In today’s trading, we expect downward correction moves in the USD, as explained in the outlook for the major pairs below. Note today’s U.S. Housing Starts and Building Permits for December, both released at 14:30 CET.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The pair’s recovery continued in early European hours, currently trading at 1.3040. We expect more recovery to come in today’s trading, testing the next upside resistance at 1.3150, from where we see some downward correction.
GBP / USD
Cable’s recovery move came to a halt in late Asian and early European trading, with current prices around 1.3860 levels in low volatility. We see another attempt today to break the 1.3950 resistance level today, but to no avail.
USD / CHF
Having reached a new high at 1.1614 yesterday, the dollar started to trade lower against the Swiss franc in early European hours and is currently priced at 1.1550. We expect more of this downmove to come, testing the 1.1480 level today.
USD / JPY
The dollar was extremely volatile against the aen before the BoJ released their monetary stance, falling by 300 pips to 87.20 yesterday, but recovered quickly as the BoJ left the interest rate unchanged. The market is currently trading around the 89.00 level, near resistance at 89.50, which we see being tested today.
In today’s trading, we expect downward correction moves in the USD, as explained in the outlook for the major pairs below. Note today’s U.S. Housing Starts and Building Permits for December, both released at 14:30 CET.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The pair’s recovery continued in early European hours, currently trading at 1.3040. We expect more recovery to come in today’s trading, testing the next upside resistance at 1.3150, from where we see some downward correction.
GBP / USD
Cable’s recovery move came to a halt in late Asian and early European trading, with current prices around 1.3860 levels in low volatility. We see another attempt today to break the 1.3950 resistance level today, but to no avail.
USD / CHF
Having reached a new high at 1.1614 yesterday, the dollar started to trade lower against the Swiss franc in early European hours and is currently priced at 1.1550. We expect more of this downmove to come, testing the 1.1480 level today.
USD / JPY
The dollar was extremely volatile against the aen before the BoJ released their monetary stance, falling by 300 pips to 87.20 yesterday, but recovered quickly as the BoJ left the interest rate unchanged. The market is currently trading around the 89.00 level, near resistance at 89.50, which we see being tested today.
