The worst U.S. economic data since 1982 in the U.S. last Friday renewed the pressure on stock markets and ignited another rally for the Greenback, although the released 4th quarter GDP figure showed a contraction below expectations. But a closer look reveals that the consumer is cutting spending fast, almost at a pace that could be a sign for a longer phase of negative price development, a bullish sign for the USD. This scenario is confirmed by the faltering stock markets, which, according to experience, look ahead for approximately 6 months in the business cycle, and obviously foresee at the moment such a deflationary tendency as well.
The rally for the dollar continued in Asian and early European trading today, leaving the market in a deeply overbought condition. Against the euro, the old highs of November, a major long-term resistance line, are soon to be tested. Under such circumstances, we would delay further buying plans for the USD and anticipate rather a countermove in today’s trading. See the details below. Note today’s U.S. personal spending and income for December at 14:30 CET and the ISM Index for January at 16:00 CET.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Currently the pair is undergoing a slight recovery move after its heavy losses last Friday. Trading at 1.2750 in early European trading and at long-term support, we see some more recovery appearing in today’s trading, correcting the deeply oversold situation. 1.2850, the next resistance point, could be tested.
GBP / USD
Cable came under pressure in Asian and early European trading. Currently at 1.4230 and near support at 1.4190, we do not see much more downside risk. Projecting a sideways trend channel for today’s trading between 1.4190 and 1.4350, we expect an upmove to set in soon.
USD / CHF
Just about to test the old highs of 1.1714 against the Swiss franc, the dollar is still in a bid tone in European morning trading and is currently at 1.1675. We do not expect a significant move above the 1.1700 resistance level today, and see rather the downside support at 1.1600 being tested later.
USD / JPY
The dollar continued to lose some more ground against the yen in early European trading, although in very low volatility. Trading right now at 89.100 in a slight recovery move, we do not have signs of real change in this quiet market today.
The rally for the dollar continued in Asian and early European trading today, leaving the market in a deeply overbought condition. Against the euro, the old highs of November, a major long-term resistance line, are soon to be tested. Under such circumstances, we would delay further buying plans for the USD and anticipate rather a countermove in today’s trading. See the details below. Note today’s U.S. personal spending and income for December at 14:30 CET and the ISM Index for January at 16:00 CET.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Currently the pair is undergoing a slight recovery move after its heavy losses last Friday. Trading at 1.2750 in early European trading and at long-term support, we see some more recovery appearing in today’s trading, correcting the deeply oversold situation. 1.2850, the next resistance point, could be tested.
GBP / USD
Cable came under pressure in Asian and early European trading. Currently at 1.4230 and near support at 1.4190, we do not see much more downside risk. Projecting a sideways trend channel for today’s trading between 1.4190 and 1.4350, we expect an upmove to set in soon.
USD / CHF
Just about to test the old highs of 1.1714 against the Swiss franc, the dollar is still in a bid tone in European morning trading and is currently at 1.1675. We do not expect a significant move above the 1.1700 resistance level today, and see rather the downside support at 1.1600 being tested later.
USD / JPY
The dollar continued to lose some more ground against the yen in early European trading, although in very low volatility. Trading right now at 89.100 in a slight recovery move, we do not have signs of real change in this quiet market today.
