It may be that the dollar’s retreat from strength just before the weekend is closely connected with this week’s full economic data calendar from the U.S., including the economic outlook of the Fed’s Mr. Bernanke before the Senate. The markets are expecting more signs this week that the U.S. economy probably has seen the worst. But when a market is clearly overbought and longer-term resistance lines are being tested, a whisper is enough to trigger a countermove. Such a whisper came into the market by the unusually clear pre-statement by G20 participants for the April London meeting, to concentrate on a unprecedented regulation willingness for global financial markets, including concerted taxing (!). A manifesto like that does not necessarily support the dollar. But the general bid mood for the dollar, intact since Summer last year, cannot be denied. It is just the major resistance line (especially visible in the EUR / USD pair), now being tested for the third time, from where the Greenback shuns away once again. It’s highly possible that it will ride more attacks against these lines until they fall, as long as the U.S. deflation theme remains intact.
Short term, and for today’s market, we do not expect much more weakness in the USD, rather a consolidation phase of the lower levels within the trading ranges projected below in the major pairs. Volatility has returned, allowing efficient trading both ways. There are no market-moving economic data scheduled for today.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Heavily overbought, the pair is in a selling mood in early European trading, currently priced at 1.2870. We see the weakness remaining for some time, testing the 1.2790 support. Afterwards, a trading range between that support and 1.2890 seems to be developing in today’s trading.
GBP / USD
Being unusually strong, cable gained further territory in this European morning, now trading at 1.4620, near a major resistance zone around 1.4650. We expect a consolidation phase soon to set in today, ranging between 1.4650 and 1.4480.
USD / CHF
The selloff of the dollar against the Swiss franc, leading to prices as low as 1.1460, has ended in early European trading, with the market recovering to now 1.1570. In today’s trading, this recovery is limited to the 1.1590 mark, giving way to a sideways moving market between that 1.1590 and 1.1480 on the downside.
USD / JPY
Having been weak against the yen in Asian trading, the dollar recovered markedly in early European hours and is currently priced at 94.45 near resistance. We do not see more strength in today’s trading and expect a downward correction to the 93.20 support zone.
Short term, and for today’s market, we do not expect much more weakness in the USD, rather a consolidation phase of the lower levels within the trading ranges projected below in the major pairs. Volatility has returned, allowing efficient trading both ways. There are no market-moving economic data scheduled for today.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
Heavily overbought, the pair is in a selling mood in early European trading, currently priced at 1.2870. We see the weakness remaining for some time, testing the 1.2790 support. Afterwards, a trading range between that support and 1.2890 seems to be developing in today’s trading.
GBP / USD
Being unusually strong, cable gained further territory in this European morning, now trading at 1.4620, near a major resistance zone around 1.4650. We expect a consolidation phase soon to set in today, ranging between 1.4650 and 1.4480.
USD / CHF
The selloff of the dollar against the Swiss franc, leading to prices as low as 1.1460, has ended in early European trading, with the market recovering to now 1.1570. In today’s trading, this recovery is limited to the 1.1590 mark, giving way to a sideways moving market between that 1.1590 and 1.1480 on the downside.
USD / JPY
Having been weak against the yen in Asian trading, the dollar recovered markedly in early European hours and is currently priced at 94.45 near resistance. We do not see more strength in today’s trading and expect a downward correction to the 93.20 support zone.
