Recently the USD and the yen got on a bicycle built for two, cycling along in perfect harmony. Volatility has decreased substantially in the pair, moving in tandem now against other currencies. This might have three interacting reasons. At first the U.S. joined the near zero club interest rate last December, therefore pointing, secondly, to a similar deflationary effect in both the currencies’ economies and, as a consequence, the carry trades between these two came to a standstill, because there is just not enough incentive to play that game any more. But, based on these thoughts, considering that present conditions will persist would be skating on pretty thin ice. Japan, the world’s second largest economy (excluding the EU as a country) is up to the chin with savings, America as the largest is the debtor to these thrifts. So the yen could soon abandon the tandem and become even stronger against the USD.
Referring to the thoughts above for the USD / JPY, we have some points to watch for in the major pair discussion below. As for today’s trading in other pairs, we expect some more dollar weakness, as explained for the major pairs in detail as well.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The pair fell back from its higher levels reached in late Asian and early European trading and is currently priced at 1.2935. We expect another upward impulse for today to set in, breaking the 1.2990 resistance level, later testing the 1.3040 mark.
GBP / USD
The now 6-day-old upmove of cable continues in early European trading. With the market currently moving around 1.4840, another attack on the 1.4900 resistance is in preparation. We expect this level to break in today’s trading, bringing the market into the main resistance zone around 1.5000.
USD / CHF
The 1.1730 level, a major resistance for the dollar against the Swiss franc, continues to hold. The market fell back from it again and is currently trading at 1.1640. We see the 1.1580 support being tested today.
USD / JPY
Continuing to trade in low volatility, the USD is currently priced at 91.50 near the 92.00 resistance. We expect the market to trade lower today, still in low volatility, testing the 91.00 support level again. A break of this level would point to prices around 89.90, which we see holding short term. Longer term, and with reference to the above general remarks, we see a bear market in the making - a confirmation for that would be a break of the 88.60 level.
Referring to the thoughts above for the USD / JPY, we have some points to watch for in the major pair discussion below. As for today’s trading in other pairs, we expect some more dollar weakness, as explained for the major pairs in detail as well.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The pair fell back from its higher levels reached in late Asian and early European trading and is currently priced at 1.2935. We expect another upward impulse for today to set in, breaking the 1.2990 resistance level, later testing the 1.3040 mark.
GBP / USD
The now 6-day-old upmove of cable continues in early European trading. With the market currently moving around 1.4840, another attack on the 1.4900 resistance is in preparation. We expect this level to break in today’s trading, bringing the market into the main resistance zone around 1.5000.
USD / CHF
The 1.1730 level, a major resistance for the dollar against the Swiss franc, continues to hold. The market fell back from it again and is currently trading at 1.1640. We see the 1.1580 support being tested today.
USD / JPY
Continuing to trade in low volatility, the USD is currently priced at 91.50 near the 92.00 resistance. We expect the market to trade lower today, still in low volatility, testing the 91.00 support level again. A break of this level would point to prices around 89.90, which we see holding short term. Longer term, and with reference to the above general remarks, we see a bear market in the making - a confirmation for that would be a break of the 88.60 level.
