The logic behind the ongoing pendulum-style market, once supporting the USD, then the euro, have still to be found in the financial world. The banking industry in Europe with its single currency moved far into risky Eastern territory, with Slovakia and Slovenia already in the euro, and Bulgaria and the three Baltic states pegged to the single currency. The Czech Republic, Hungary and Poland are in the EU, and Romania, the youngest member, already has to be bailed out of financial trouble. Greece and Italy, euro founding members, have to pay hefty risk premiums for their bonds issued. So bad news from the European financial world immediately puts pressure on the euro. But the other side of the pond has to struggle with its own banking problems as well, and the same swing forces on Forex work from there, too. Who will be the first to solve their financial problems, the much more coherent United States or Europe? Then it would not be too far-fetched to assume the see-saw market ending in favor of the USD longer term.
In today’s trading, we expect the USD to gain strength again, based on its oversold situation short term, as described in detail for the major pairs below. Note the 13:30 CET release of U.S. retail sales for February, where the contraction is expected to slow down.
Intraday Market Outlook for Day Traders
EUR / USD
The pair tested the 1.2870 resistance level in late Asian trading but failed to break it, retreating to the current 1.2790 in European morning hours. We expect more downmove to emerge in today’s trading, testing the 1.2630 support level.
GBP / USD
Currently in a consolidation phase on low levels and trading now at 1.3795, we see little room for recovery today, 1.3850 at the most, and later further weakness, testing the 1.3650 support.
USD / CHF
The dollar is still caught in its narrow trading range between 1.1620 and 1.1510 in early European trading, now on a minor downmove and priced at 1.1560 against the Swiss franc. We expect some strength to develop in today’s trading, not exceeding the 1.1650 level.
USD / JPY
Losing further ground against the yen in Asian trading, the dollar is currently priced at 96.10 in some upward correction of the recent downtrend. We expect that upward correction to develop more strength today, leading to a test of the 96.90 resistance level.
In today’s trading, we expect the USD to gain strength again, based on its oversold situation short term, as described in detail for the major pairs below. Note the 13:30 CET release of U.S. retail sales for February, where the contraction is expected to slow down.
Intraday Market Outlook for Day Traders
EUR / USD
The pair tested the 1.2870 resistance level in late Asian trading but failed to break it, retreating to the current 1.2790 in European morning hours. We expect more downmove to emerge in today’s trading, testing the 1.2630 support level.
GBP / USD
Currently in a consolidation phase on low levels and trading now at 1.3795, we see little room for recovery today, 1.3850 at the most, and later further weakness, testing the 1.3650 support.
USD / CHF
The dollar is still caught in its narrow trading range between 1.1620 and 1.1510 in early European trading, now on a minor downmove and priced at 1.1560 against the Swiss franc. We expect some strength to develop in today’s trading, not exceeding the 1.1650 level.
USD / JPY
Losing further ground against the yen in Asian trading, the dollar is currently priced at 96.10 in some upward correction of the recent downtrend. We expect that upward correction to develop more strength today, leading to a test of the 96.90 resistance level.
