The FOMC’s decision yesterday to keep interest rates near zero was more or less expected. More important is the wording it used, which can be put in a nutshell: "We will run the money printing press red hot if necessary." Stock markets took new courage, not due to that issue, but to the new U.S. bailout plan which passed the House, as well as the new U.S. initiative to form a bad bank, a "national kitchen sink," where banks could dump their toxic assets into one state-controlled bank. If only they would have picked up on that solution proposal earlier. Despite the long-term negative aspects for inflation of all this, the dollar gained strength. We doubt it can keep it for long in the current circumstances.
For today’s trading, we expect down movements developing for the dollar, reversing its bid tone in early European trading hours. See the descriptions below for the major pairs. Note today’s U.S. durable orders data release for December, 14:30 CET, where some slowdown of the decline is expected.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The pair lost further territory in early European trading, influenced by bad economic data within the Eurozone. Currently trading at 1.3045 near a major support zone between present levels and 1.3000, we do not reckon with much more down risk. Based on the now oversold situation, recovery moves are due to set in today, leading to levels around 1.3150.
GBP / USD
Cable retreated further in European morning trading to current levels of 1.4130. We do not expect the 1.4100 handle support to be broken much today on the downside and anticipate upmoves to set in from there. The upside then is limited to approximately 1.4200.
USD / CHF
Trading continously higher in early European trading, the dollar is currently priced at 1.1550 against the Swiss franc. The current upmove will soon run into a solid resistance point at 1.1600, which we expect to hold. A retreat then to support at 1.1460 is in the cards.
USD / JPY
For today’s trading, we expect the trading range between 90.60/89.70 to remain intact. The dollar currently is trading in the middle of it at 90.10 against the yen in low volatility, which we see staying low today.
For today’s trading, we expect down movements developing for the dollar, reversing its bid tone in early European trading hours. See the descriptions below for the major pairs. Note today’s U.S. durable orders data release for December, 14:30 CET, where some slowdown of the decline is expected.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The pair lost further territory in early European trading, influenced by bad economic data within the Eurozone. Currently trading at 1.3045 near a major support zone between present levels and 1.3000, we do not reckon with much more down risk. Based on the now oversold situation, recovery moves are due to set in today, leading to levels around 1.3150.
GBP / USD
Cable retreated further in European morning trading to current levels of 1.4130. We do not expect the 1.4100 handle support to be broken much today on the downside and anticipate upmoves to set in from there. The upside then is limited to approximately 1.4200.
USD / CHF
Trading continously higher in early European trading, the dollar is currently priced at 1.1550 against the Swiss franc. The current upmove will soon run into a solid resistance point at 1.1600, which we expect to hold. A retreat then to support at 1.1460 is in the cards.
USD / JPY
For today’s trading, we expect the trading range between 90.60/89.70 to remain intact. The dollar currently is trading in the middle of it at 90.10 against the yen in low volatility, which we see staying low today.
