The current U.S. economic data still shows the same picture, namely an economy having probably seen its trough, quite in contrast to Continental Europe. This can be generally seen as a bearish factor for the dollar, because if the economy is to revive in America first, it will mean it is going to be hit by inflation first as well, given the huge monetary and fiscal expansion (which is dwarfing that in Europe). Accordingly, the USD traded lower last week against the majors but is moving in heavily oversold condition in European morning trading. What’s more, the trade-weighted USD Index is now on longer-term support and in the daily chart the longer-term upward trend line is just being tested.

We expect upward corrections in the USD for today’s trading as projected below in the major pairs. After a week of world summits galore, the focus will turn back to fundamental economic data; for today, however, there are no market-moving releases scheduled.

Intraday Market Outlook for Day Traders

EUR / USD
After attempting to test the 1.3600 resistance in Asian trading, the pair fell back in European morning trading and is currently priced at 1.3530. We expect lower levels to be reached today, probably testing the 1.3450 support level, before another upmove can set in.

GBP / USD
Cable traded as high as 1.4950 in European trading and is now on a slight down correction move, trading at 1.4920. We expect more of this correction move to come today, testing the 1.4820 support.

USD / CHF
Against the Swiss franc, the dollar is about to test the 1.1250 support in early European trading and is now priced at 1.1270. We expect that support to hold today and see an upmove later, to levels around 1.1350.

USD / JPY
The dollar broke the 101.00 resistance zone against the yen in early European trading, and is currently priced at 101.30. We expect more of that strength to develop in today’s trading, leading to the 102.20 level.