Yesterday’s announcement of the ECB’s monetary policy will make history: as a child of the former Bundesbank of Germany, it is the first time that this institution officially declares to print money to save the economy, an action the Bundesbank would have not even thought about. But will the new policy have an effect? In contrast to the more homogenous bond markets in the U.S. and Great Britain, the ones on the Continent and the Eurozone are much more fragmented and less liquid, making it difficult to intervene in the same style as the U.S. Fed can in its home market, for example. So most probably the ECB’s brave decision will not have much effect on the Eurozone’s economy. The currency market realized this quickly: the first reaction to the announcement was a strengthening of the euro in the prospect of rising bond markets, but then the market turned to business as usual, a sideways development of the EUR / USD.
Nevertheless, there is still some selling tone in the USD, reflecting the outlook on an economy passing its trough and therefore raising aspects of inflation. This European morning saw another slight bout of weakness in the Greenback, and we expect that mood to continue in today’s trading, although in a moderate development, as described in detail below. Note today’s April data for U.S. nonfarm payrolls and unemployment rate at 14:30 CET.
Intraday Market Outlook for Day Traders
EUR / USD
In Asian and early European trading, the pair moved in narrow ranges between 1.3400 and 1.3350. Trading currently at 1.3395 in a slight upmove, we expect the 1.3350 mark to be tested again, but do not see much more volatility appearing in today’s market.
GBP / USD
Cable is still following its sideways trend in this European morning, currently trading at 1.5030 in a recovery attempt towards the upper limit of the current trading band at 1.5100. We see that limit being tested today, but not broken.
USD / CHF
Hovering above a long-term support against the Swiss franc, the dollar is currently priced at 1.1285. We expect support around 1.1250 to hold in today’s trading, but cannot see any substantial upside movement for the dollar today.
USD / JPY
After a directionless Asian trading session, the dollar is recovering somewhat in the early European hours against the yen, right now at 99.40. We see that slow recovery continuing in today’s hours, but not exceeding the 99.70 level.
Nevertheless, there is still some selling tone in the USD, reflecting the outlook on an economy passing its trough and therefore raising aspects of inflation. This European morning saw another slight bout of weakness in the Greenback, and we expect that mood to continue in today’s trading, although in a moderate development, as described in detail below. Note today’s April data for U.S. nonfarm payrolls and unemployment rate at 14:30 CET.
Intraday Market Outlook for Day Traders
EUR / USD
In Asian and early European trading, the pair moved in narrow ranges between 1.3400 and 1.3350. Trading currently at 1.3395 in a slight upmove, we expect the 1.3350 mark to be tested again, but do not see much more volatility appearing in today’s market.
GBP / USD
Cable is still following its sideways trend in this European morning, currently trading at 1.5030 in a recovery attempt towards the upper limit of the current trading band at 1.5100. We see that limit being tested today, but not broken.
USD / CHF
Hovering above a long-term support against the Swiss franc, the dollar is currently priced at 1.1285. We expect support around 1.1250 to hold in today’s trading, but cannot see any substantial upside movement for the dollar today.
USD / JPY
After a directionless Asian trading session, the dollar is recovering somewhat in the early European hours against the yen, right now at 99.40. We see that slow recovery continuing in today’s hours, but not exceeding the 99.70 level.
