Shaky global stock markets once again ignited more strength for the USD, luring more investors’ money into attractive U.S. bond markets, where the longer-term segment still offers yield advantage. The Greenback is clearly overbought though now and, considering its high correlation these days with the stock markets which are as clearly oversold, a correction downmove for the USD might be soon in the cards. On the other hand, important long-term resistance zones have been penetrated now, pointing to further strength for the currency. In the EUR / USD pair, this zone is 1.2500, broken for some time yesterday, which indicates a further longer-term downmove to 1.1750. But that takes time, currencies tend to overshoot the chartist's targets often, only to make a U-turn in the shorter-term time window.
Therefore, and for today’s trading, we would delay any buying plans for the dollar, expecting countermoves in the major pairs as described below. Tomorrow the ECB and BoE will publish their interest rate decisions. While the markets definitely expect further reductions, the recent upcoming discussion whether the so far reluctant ECB will finally join the Fed’s policy of "quantitative easing," i.e. buying up the single currency zone’s bonds, thus supporting the euro.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
After breaking the important 1.2500 support level, the pair is currently trading at 1.2520 in early European hours in a recovery move. We expect that move to continue in today’s trading, testing the 1.2590 / 1.2610 resistance zone.
GBP / USD
Cable still remains in its bottom building process, caught in a narrow range between 1.4100 and 1.4000, currently in a slight upmove and priced now at 1.4070. We see the 1.4100 resistance level being broken in today’s trading, with the market eventually testing the 1.4150 mark.
USD / CHF
The dollar is attempting to attack the important resistance line at 1.1850 in European morning trading and is currently at 1.1820 against the Swiss franc. We do not expect the 1.1850 mark to be broken on the upside today, but later anticipate a downward correction move to the 1.1770 support level.
USD / JPY
Against the yen, the dollar is clearly maintaining its strength, moving up again in early European hours and currently trading on a new year’s high at 99.45. We see attacks on the 100.00 handle level today, but not breaking it on the upside. Setbacks from there are to be expected.
Therefore, and for today’s trading, we would delay any buying plans for the dollar, expecting countermoves in the major pairs as described below. Tomorrow the ECB and BoE will publish their interest rate decisions. While the markets definitely expect further reductions, the recent upcoming discussion whether the so far reluctant ECB will finally join the Fed’s policy of "quantitative easing," i.e. buying up the single currency zone’s bonds, thus supporting the euro.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
After breaking the important 1.2500 support level, the pair is currently trading at 1.2520 in early European hours in a recovery move. We expect that move to continue in today’s trading, testing the 1.2590 / 1.2610 resistance zone.
GBP / USD
Cable still remains in its bottom building process, caught in a narrow range between 1.4100 and 1.4000, currently in a slight upmove and priced now at 1.4070. We see the 1.4100 resistance level being broken in today’s trading, with the market eventually testing the 1.4150 mark.
USD / CHF
The dollar is attempting to attack the important resistance line at 1.1850 in European morning trading and is currently at 1.1820 against the Swiss franc. We do not expect the 1.1850 mark to be broken on the upside today, but later anticipate a downward correction move to the 1.1770 support level.
USD / JPY
Against the yen, the dollar is clearly maintaining its strength, moving up again in early European hours and currently trading on a new year’s high at 99.45. We see attacks on the 100.00 handle level today, but not breaking it on the upside. Setbacks from there are to be expected.
