While dismal economic news is flowing from both sides of the Atlantic, the dollar experienced faltering volatility in the majors yesterday, but picked up some strength in early European trading today. A kind of wait-and-see stance has set in, with the market ear-flappingly eager to hear the first hints from the new U.S. administration about whether or not it could be protectionist-oriented. We think it is far too early to decide on that, and prefer concentrating on what the real fundamentals are telling us. There is the possibility of further negative consumer price development, perhaps leading to an outright deflation, which would explain the overall bullish stance of the USD and the expectation of the dollar’s further shrinking interest rate differential to other currencies, especially the euro but excluding the yen. This is the longer-term picture.
Short term, the EUR / USD pair is about to end a confirmation signal for its downtrend in European morning trading. We expect the USD to develop some further strength in today’s trading in the major pairs. See the details below.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The support zone at 1.2850 for the pair has been broken on the downside in European morning with the market now at 1.2790. An intermediate up correction could set in now, but we see further downmoves setting in today, eventually testing the 1.2690 support level.
GBP / USD
The pound continued its downtrend in early European trading and is currently priced at 1.3540. An upward move is now likely, but not to exceed resistance at 1.3590. Renewed downward momentum then is to be expected today.
USD / CHF
Against the Swiss franc, the dollar gained further strength in European morning trading, reaching a high of 1.1683. Currently trading at 1.1649 in a slight retreat which could move on for some time, we expect the market to go near the next long-term resistance point at 1.1750 today.
USD / JPY
The dollar eased further in late Asian and early European trading against the yen. With the market now at 88.20 and on an intermediate support, we expect the next support at 87.20 to be tested today in slow trading
Short term, the EUR / USD pair is about to end a confirmation signal for its downtrend in European morning trading. We expect the USD to develop some further strength in today’s trading in the major pairs. See the details below.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The support zone at 1.2850 for the pair has been broken on the downside in European morning with the market now at 1.2790. An intermediate up correction could set in now, but we see further downmoves setting in today, eventually testing the 1.2690 support level.
GBP / USD
The pound continued its downtrend in early European trading and is currently priced at 1.3540. An upward move is now likely, but not to exceed resistance at 1.3590. Renewed downward momentum then is to be expected today.
USD / CHF
Against the Swiss franc, the dollar gained further strength in European morning trading, reaching a high of 1.1683. Currently trading at 1.1649 in a slight retreat which could move on for some time, we expect the market to go near the next long-term resistance point at 1.1750 today.
USD / JPY
The dollar eased further in late Asian and early European trading against the yen. With the market now at 88.20 and on an intermediate support, we expect the next support at 87.20 to be tested today in slow trading
