Japan, still the world’s second largest economy (the EU not considered a single state) may have its own homemade problems, especially in politics. But the sound state of Nippon’s banks is envied by Western bank managers these days, and the nation’s current account is as fit as a fiddle, like the foreign reserves. Slumping export figures, though, extremely overshadow the economic future, but a good part of that can be blamed on the as-well extremely distorted world trade financing, which can be considered a temporary problem. Taking all that into account, it is no wonder that Japan’s currency is still the most stable in the world, supported by a deflationary outlook. On the other hand, the nation is dependent on fossil fuel. Oil, for instance, rose from its lows to now well over $45/brl. Not surprising, then, that the yen strongly correlates with the oil price these days, even in the very short-term view, like the hourly development in the USD / JPY pair. Any rise in oil prices is reflected as weakness in the currency, provoking thoughts that inflation could return to the deflated economy. The USD / JPY might well be a longer-term buy under these circumstances.
In the major pairs, for today’s trading, we expect a consolidation of the USD’s split performance in yesterday’s trading: Higher against the JPY and CHF (the SNB intervention in the currency markets and lowered interest rates to near zero) and lower against the EUR and GBP. Below are the details of the expected trading ranges. Note the 13:30 CET publication of the U.S. trade balance for January.
Intraday Market Outlook for Day Traders
EUR / USD
The pair followed its uptrend that started 5 days ago in today’s Asian and early European trading, right now consolidating its higher levels at 1.2890. We expect that consolidation to continue today, not exceeding 1.2950 on the upside and limited to 1.2850 on the downside.
GBP / USD
The pound gained territory against the dollar and is now trading at 1.4020. With the market overbought and bumping into a solid resistance zone at the 1.4000 level, we do not see much more upmove in today’s trading and project a consolidation zone between 1.4050 and 1.3950.
USD / CHF
The intervention by the SNB catapulted the dollar by more than 300 pips against the Swiss franc yesterday. In all of Asian trading and in European morning hours, the dollar defended its higher levels, leaving the market in a trading range between 1.1940 and 1.1840. With the market now near the lower end of the range at 1.1850, we expect upmoves to set in today towards the higher end at 1.1940.
USD / JPY
The dollar moved up further in late Asian and early European trading against the yen and is currently priced at 98.30. After some downward correction, we expect another upmove, resulting in a test of the 99.00 resistance level.
In the major pairs, for today’s trading, we expect a consolidation of the USD’s split performance in yesterday’s trading: Higher against the JPY and CHF (the SNB intervention in the currency markets and lowered interest rates to near zero) and lower against the EUR and GBP. Below are the details of the expected trading ranges. Note the 13:30 CET publication of the U.S. trade balance for January.
Intraday Market Outlook for Day Traders
EUR / USD
The pair followed its uptrend that started 5 days ago in today’s Asian and early European trading, right now consolidating its higher levels at 1.2890. We expect that consolidation to continue today, not exceeding 1.2950 on the upside and limited to 1.2850 on the downside.
GBP / USD
The pound gained territory against the dollar and is now trading at 1.4020. With the market overbought and bumping into a solid resistance zone at the 1.4000 level, we do not see much more upmove in today’s trading and project a consolidation zone between 1.4050 and 1.3950.
USD / CHF
The intervention by the SNB catapulted the dollar by more than 300 pips against the Swiss franc yesterday. In all of Asian trading and in European morning hours, the dollar defended its higher levels, leaving the market in a trading range between 1.1940 and 1.1840. With the market now near the lower end of the range at 1.1850, we expect upmoves to set in today towards the higher end at 1.1940.
USD / JPY
The dollar moved up further in late Asian and early European trading against the yen and is currently priced at 98.30. After some downward correction, we expect another upmove, resulting in a test of the 99.00 resistance level.
