The Canadian and Australian dollar strengthened recently against the USD and the EUR, reflecting more confidence in a recovering world economy. Is it really recovering? There are more and more signs of that. For instance, commodity prices, especially the industrial ones like copper, iron ore, zinc and tin, recovered, with their future markets going limit up recently, and oil is up as well. Another sign of economic resurrection comes from the world freight market, showing signs of new life, too.
A lot of this impetus for demand comes from the Asian world, though, not from the U.S. or from Europe. Excluding Japan, Asia is in much better shape now, having no need to blow up their monetary and fiscal policy to fight their homemade crisis. This outlook does not bode well for a bullish stance on the dollar, nor on the euro in the future; both currencies will suffer from inflation sooner or later. For now, the dollar is capped with a visible lid on its market, preventing even rises against the euro, where a current deflationary outlook still supports the currency. First, we would keep an eye in the longer term on the CAD and AUD against the dollar, expecting more upward movements.
In today‘s trading we expect some up correction moves in the USD against the major markets because of its now heavily oversold condition. That development already started in late Asian and early European market hours, but will probably not lead far today. More downward pressure could develop later today, (see below our detailed trading band projections), especially when the U.S. ISM Services data for March is better than expected, due at 16:00 CET.
Intraday Market Outlook for Day Traders
EUR / USD
The euro is consolidating its higher levels reached yesterday against the dollar in early European trading and is currently priced at 1.3370. We see some higher levels being approached today, again testing the highs above 1.3400, but beforehand we reckon with a down correction to the support at 1.3330.
GBP / USD
Cable is trading in an unbroken uptrend this European morning, right now near the day’s high at 1.5080. A down correction is now in the cards, to levels around 1.5020 again, before a further upmove sets in, probably breaking the 1.5100 handle level.
USD / CHF
The dollar is in a weak condition against the Swiss franc in early European trading, although with low volatility - right now priced at 1.1310, approaching its recent lows around 1.1250. We expect these lows to be tested again today.
USD / JPY
For two days, the dollar has been in a directionless mood against the yen, just consolidating its higher levels in early European trading again near the 100.00 handle level, now at 99.10. We see that move continuing in today’s trading, testing again the 100.00 resistance point, but not breaking it.
A lot of this impetus for demand comes from the Asian world, though, not from the U.S. or from Europe. Excluding Japan, Asia is in much better shape now, having no need to blow up their monetary and fiscal policy to fight their homemade crisis. This outlook does not bode well for a bullish stance on the dollar, nor on the euro in the future; both currencies will suffer from inflation sooner or later. For now, the dollar is capped with a visible lid on its market, preventing even rises against the euro, where a current deflationary outlook still supports the currency. First, we would keep an eye in the longer term on the CAD and AUD against the dollar, expecting more upward movements.
In today‘s trading we expect some up correction moves in the USD against the major markets because of its now heavily oversold condition. That development already started in late Asian and early European market hours, but will probably not lead far today. More downward pressure could develop later today, (see below our detailed trading band projections), especially when the U.S. ISM Services data for March is better than expected, due at 16:00 CET.
Intraday Market Outlook for Day Traders
EUR / USD
The euro is consolidating its higher levels reached yesterday against the dollar in early European trading and is currently priced at 1.3370. We see some higher levels being approached today, again testing the highs above 1.3400, but beforehand we reckon with a down correction to the support at 1.3330.
GBP / USD
Cable is trading in an unbroken uptrend this European morning, right now near the day’s high at 1.5080. A down correction is now in the cards, to levels around 1.5020 again, before a further upmove sets in, probably breaking the 1.5100 handle level.
USD / CHF
The dollar is in a weak condition against the Swiss franc in early European trading, although with low volatility - right now priced at 1.1310, approaching its recent lows around 1.1250. We expect these lows to be tested again today.
USD / JPY
For two days, the dollar has been in a directionless mood against the yen, just consolidating its higher levels in early European trading again near the 100.00 handle level, now at 99.10. We see that move continuing in today’s trading, testing again the 100.00 resistance point, but not breaking it.
