While the BoE could cut interest rates by another 50 basis points today, the ECB most probably will not cut at all, despite similar economic conditions on the Continent, recession and falling inflation. That would support the euro short term, still carrying a high interest rate differential for at least another month compared to near zero rate currencies like the USD, JPY and CHF. Longer term, of course, even the ECB will have to cut interest as well, but it remains unclear for now where the U.S. economy is heading, which will be crucial in assessing the future path of the European currency.
Both pound and euro are trading in narrow range-bound markets in late Asian and early European hours ahead of the rate decisions today, 13:00 CET by the BoE and 13:45 CET by the ECB. We are inclined to buy the euro against the dollar in today’s trading, but would not enter the market before the monetary policy of the ECB is reported (14:30 CET). See below our pivotal trading points for today in the major pairs. .
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Characterized by low volatility ahead of the ECB’s rate decision, the pair is currently trading at 1.2865 in a slight recovery move this European morning. We expect volatility to increase markedly after the rate decision, when we would use downmoves to 1.2650 as a buying opportunity and 1.2940 as a selling point.
GBP / USD
Cable is in recovery mood in early European trading, ahead of the BoE’s rate decision. Currently the pair is priced at 1.4520, near the upper limit for today’s trading at 1.4550. We see that level holding, while downmoves would find support at 1.4420.
USD / CHF
The dollar followed a narrow trading range against the Swiss franc in late Asian and early European hours and is currently priced at around 1.1610. We see this only 30-pip-wide range being broken today on the downside, to support level at 1.1510. Upmoves will be limited to 1.1640.
USD / JPY
Against the yen, the dollar recovered slightly in late Asian trading and is consolidating its level in early European trading at the current 89.70 mark. Since the USD has become a near zero interest rate currency like the yen is, volatility shrunk to very low levels. We do not see a change in that for today, projecting a range of only 89.90 / 89.35.
Both pound and euro are trading in narrow range-bound markets in late Asian and early European hours ahead of the rate decisions today, 13:00 CET by the BoE and 13:45 CET by the ECB. We are inclined to buy the euro against the dollar in today’s trading, but would not enter the market before the monetary policy of the ECB is reported (14:30 CET). See below our pivotal trading points for today in the major pairs. .
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Characterized by low volatility ahead of the ECB’s rate decision, the pair is currently trading at 1.2865 in a slight recovery move this European morning. We expect volatility to increase markedly after the rate decision, when we would use downmoves to 1.2650 as a buying opportunity and 1.2940 as a selling point.
GBP / USD
Cable is in recovery mood in early European trading, ahead of the BoE’s rate decision. Currently the pair is priced at 1.4520, near the upper limit for today’s trading at 1.4550. We see that level holding, while downmoves would find support at 1.4420.
USD / CHF
The dollar followed a narrow trading range against the Swiss franc in late Asian and early European hours and is currently priced at around 1.1610. We see this only 30-pip-wide range being broken today on the downside, to support level at 1.1510. Upmoves will be limited to 1.1640.
USD / JPY
Against the yen, the dollar recovered slightly in late Asian trading and is consolidating its level in early European trading at the current 89.70 mark. Since the USD has become a near zero interest rate currency like the yen is, volatility shrunk to very low levels. We do not see a change in that for today, projecting a range of only 89.90 / 89.35.
