A parallel is useful in geometry, but not in complex economic life. The now quite common media sport in these depressed economic times is to evoke experiences made in the 1930s, when depression and deflation hit very hard. These parallels being drawn must be considered highly questionable. We are in a very real 2009 A.D., not in the 1930s, when the gold standard prevailed, the Federal Reserve was too young to really know what to do in the face of a crisis and a still very proud America, with her closed economy, was isolationist and turned to outright protectionism. Many such parallels have been drawn in recent times. Remember the 1987 stock market crash? Oh, it’s just like 1929, of course, now the big bear market is ahead, and depression is around the corner. The contrary has happened, fortunes have been made afterwards in the biggest stock market rise in history and the longest economic expansion. The same with the 1981 comparison then made as to the dollar: we are in a 1920 Weimar-like hyperinflation and the Greenback will be wiped out. The dollar more than doubled its trade weighted value until 1984. Out of all that nonsense, one thing is interesting: It is only brought up when things are going bad. No economic history comparison is made in good times.
In today’s trading, we do not expect the USD to gain more strength and see the sideways motion continuing, as outlined below in the major pairs. Right now in European morning trading, the dollar is gaining territory and is about to test its upper resistance levels, from where we see another setback. U.S. consumer prices are due today, at 14:30 CET. A slight increase is expected.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The pair’s attempt to test its support zone around 1.2550 in early European trading failed again, with the market recovering right now, priced at 1.2615. We expect this recovery to continue in today’s market hours, but not breaking the 1.2690 level. From there another setback is likely, testing again 1.2550.
GBP / USD
Cable is in an upmove in European morning, having tested the 1.4150 support. Now trading at 1.4280, we expect that recovery mood to lose steam in today’s trading, around the 1.4320 level, and later to drop back to 1.4250.
USD / CHF
The dollar climbed steadily in late Asian and early European trading against the Swiss franc and noted a new year’s high at 1.1884. Consolidating the new territory right now and trading at 1.1860, we do not see much further upside potential. A test of the 1.1780 support level is likely.
USD / JPY
The dollar lost some ground against the yen in Asian trading with low volatility and is recovering slightly right now in early European hours, currently priced at 93.95. We do not see much movement in this pair in the remaining trading hours, only a slight improvement to the 94.30 level.
In today’s trading, we do not expect the USD to gain more strength and see the sideways motion continuing, as outlined below in the major pairs. Right now in European morning trading, the dollar is gaining territory and is about to test its upper resistance levels, from where we see another setback. U.S. consumer prices are due today, at 14:30 CET. A slight increase is expected.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The pair’s attempt to test its support zone around 1.2550 in early European trading failed again, with the market recovering right now, priced at 1.2615. We expect this recovery to continue in today’s market hours, but not breaking the 1.2690 level. From there another setback is likely, testing again 1.2550.
GBP / USD
Cable is in an upmove in European morning, having tested the 1.4150 support. Now trading at 1.4280, we expect that recovery mood to lose steam in today’s trading, around the 1.4320 level, and later to drop back to 1.4250.
USD / CHF
The dollar climbed steadily in late Asian and early European trading against the Swiss franc and noted a new year’s high at 1.1884. Consolidating the new territory right now and trading at 1.1860, we do not see much further upside potential. A test of the 1.1780 support level is likely.
USD / JPY
The dollar lost some ground against the yen in Asian trading with low volatility and is recovering slightly right now in early European hours, currently priced at 93.95. We do not see much movement in this pair in the remaining trading hours, only a slight improvement to the 94.30 level.
