When Mr. Geithner, the U.S. Secretary of the Treasury, presented his first draft of a solution for the crippled banking system back in February, the Dow Jones tumbled. Too elusive and unclear, the markets decided. The opposite is happening now, with Wall Street jumping for joy on learning about the newest administration plan: Each dollar from private investment in banks will be supported by half a dollar from the taxpayer. A bargain like that does the trick, buying bank capital for half the risk. On the other hand: Who imagined in the wild Eighties and Nineties that an equity market would be subsidized by the government? No wonder the USD is on this downward course, with Forex fearing future inflation trouble. The market expects the Europeans would never go that far, and the EUR / USD soared. Although still heavily overbought, the pair seems to easily break resistance points now, being on a solid bid tone. We expect that bid tone to remain now longer term, in other words, the money flow turning its back to the USD this year.
Short term and for today’s trading, there is still correction work to be done in the Greenback’s weakness, in a sort of a sideways movement in the major pairs, as explained in detail below. There are no specifically market-moving data scheduled for today.
Intraday Market Outlook for Day Traders
EUR / USD
The pair is continuing to defend its higher levels, trading currently at 1.3570, at the lower end of the consolidation range in European morning trading. We expect the range to hold in today’s trading, using the 1.3520 support level as a springboard for another up movement within the range up to 1.3650.
GBP / USD
Despite its overbought condition, cable continues to be in demand in early European trading and is now priced at 1.4720. We see down corrections setting in soon today, but limited to 1.4620. From there, another upmove is in the cards, exceeding the present level.
USD / CHF
Obviously, the dollar has found an important support zone against the Swiss franc, around the 1.1200 handle level, and is currently priced at 1.1250. With this support zone active now for three days, we expect it to hold in today’s trading, but do not project any special up movement for today. The 1.1290 level mark should be the top.
USD / JPY
The dollar again attacked the 99.00 resistance level against the yen in Asian trading but to no avail - 98.60 was the turning point to the current down movement in early European trading, with the market now at 98.20. We see continued testing of the 98.00 support level today before another upmove can set in, but again not exceeding the 99.00 area.
Short term and for today’s trading, there is still correction work to be done in the Greenback’s weakness, in a sort of a sideways movement in the major pairs, as explained in detail below. There are no specifically market-moving data scheduled for today.
Intraday Market Outlook for Day Traders
EUR / USD
The pair is continuing to defend its higher levels, trading currently at 1.3570, at the lower end of the consolidation range in European morning trading. We expect the range to hold in today’s trading, using the 1.3520 support level as a springboard for another up movement within the range up to 1.3650.
GBP / USD
Despite its overbought condition, cable continues to be in demand in early European trading and is now priced at 1.4720. We see down corrections setting in soon today, but limited to 1.4620. From there, another upmove is in the cards, exceeding the present level.
USD / CHF
Obviously, the dollar has found an important support zone against the Swiss franc, around the 1.1200 handle level, and is currently priced at 1.1250. With this support zone active now for three days, we expect it to hold in today’s trading, but do not project any special up movement for today. The 1.1290 level mark should be the top.
USD / JPY
The dollar again attacked the 99.00 resistance level against the yen in Asian trading but to no avail - 98.60 was the turning point to the current down movement in early European trading, with the market now at 98.20. We see continued testing of the 98.00 support level today before another upmove can set in, but again not exceeding the 99.00 area.
