The Dollar develops renewed strength out of oversold levels. The weekend`s G7/20 meeting first weakened the USD with a more optimistic outlook for the economy, nourishing inflation sorrows, but then the stock market futures turned negative, reviving the old inverse correlation with the USD. Like so many times this year, we are back in the old see-saw market, especially visible in the EUR/USD market, where the Euro is heading once again lower this European morning. An end of this back and forth movement will not come before there is more certainty that America has passed the trough of recession. So far the important US spring data, usually a harbinger of economic revival, shows nothing of that kind.

For today`s trading we expect the bid tone in the USD to remain intact, as described in below`s major pair projections. Note today`s speech of ECB`s Monsieur Trichet in the United States, at 18:45 CET, in the conference of "Strategic Trends in Global Finance".

Intraday Market Outlook for Day Traders

EUR/USD
Currently trading at 1.3165 and on an intermediate support the pair recovered somewhat in this European morning. We see further weakness to come today, breaking the 1.3150 support, leading to prices below 1.3100.

GBP/USD
The Pound traded weaker in all of Asian and early European hours, currently hovering above the 1.4500 support at 1.4540 right now. We expect that support being broken today, eventually testing 1.4400 support level.

USD/CHF
The Dollar strengthened in the morning European hours against the Swiss Franc, currently trading at 1.1460, from lows around 1.1360. Some downward correction may set in soon, but not below 1.1420, from where we see upward movements, to levels around 1.1510.

USD/JPY
Trading lower in Asian and morning European hours, the Dollar is priced right now at 96.55 against the Yen, on a longer term support. We do not see much more downside risk in today`s market hours, and expect later a bid tone to emerge, lifting the market to the 97.50 level again.