Yesterday's U.S. economic data for March showed no sign of revival. On the contrary, industrial production and capacity utilization contracted slightly, and consumer prices slipped into negative territory. The Fed's beige book then revealed the institution's usual sorrows, although a few lines highlighted the hope that this year will see the trough of the recession. Forex markets are still undecided about that and wait for more data, especially from the U.S., where another batch of reports will be released today. There is also the ongoing earnings season, with mixed results so far (here the U.S. looks better than Europe, with UBS's 1Q heavy loss coming as another shock).
The conclusion of all that for the further development is still the same: The sideways market will remain intact for the near future.
In today's trading, we expect the see-saw to keep its rhythm, within the trading ranges projected below for the major pairs, featuring entry and exit points. Today, another lot of U.S. market-moving data is in the pipeline: March housing starts and permits and weekly initial jobless claims at 14:30 CET. Also of interest this time could be the Philadelphia Fed index for April at 16:00 CET (further contraction or not), interesting because it is the first one of the several Federal institutions' reports for this month.
Intraday Market Outlook for Day Traders
EUR / USD
Hovering above support levels in this European morning, the pair is currently trading at 1.3160. We expect the 1.3150 support at the lower end of the sideways trend channel to more or less hold in today’s trading, serving as as a springboard to the upper end at 1.3290.
GBP / USD
Cable traded lower in early European trading and is currently priced at 1.4920. We expect the intraday support level around 1.4870 not to be broken in today’s trading and see a move back to the 1.4980 mark. From there, renewed weakness will most probably set in again.
USD / CHF
The now three-day-old short-term uptrend of the dollar against the Swiss franc is bumping into its upper trend channel line around 1.1520, which is also a longer-term resistance point. Currently trading at 1.1490, downmoves could set in soon, leading to the lower end of the channel at 1.1430.
USD / JPY
In a typical countermove compared to other pairs, the dollar lost ground in Asian trading against the yen and is currently priced at 98.70 in European morning trading. We see this level more or less holding in today’s trading, with an upmove later to resistance around 99.40.
