Once again, a leading indicator for the US economy - durable goods orders for April yesterday - was much better than expected. Together with other indicators before, it has further nourished the expectation of an economic recovery, but also the sorrows about future inflation, given the enormous monetary and fiscal stimulus America had to roll out. Accordingly, the Greenback suffers every time with good economic data and/or a stimulated stock market as more investors accept greater risk. Today the second revision of the US GDP for the 1st quarter will be released, most probably showing an improvement vs the first estimate, which will have the same effect on the Dollar.
Accordingly we lowered our trading band projections for today`s trading in the USD, as described in major pairs list below. The US GDP for the first quarter,will be published at 14:30 CET. Also interesting, at the same time, could be the release of corporate profits in the 1st quarter. They most probably look much better than anticipated a quarter ago.
Due to the Whit Monday Holiday, our next report will appear on Tuesday, June 2.
by George Clement
Intraday Market Outlook for Day Traders
EUR/USD
The bid tone for the pair continues in this European morning, with the price right now at 1.4020. Despite the overbought condition of this market, we do not expect much of downside correction today, rather an attempt to break the resistance 1.4100.
GBP/USD
Cable is in a bull market in early European trading, about to test the 1.6100 resistance level, right now priced at 1.6080. We expect some downward corrections soon, but not moving beyond the 1.6030 support for today. A trading band between that level and 1.6100 on the upside then is likely.
USD/CHF
The Dollar fell below its 1.0850 support level against the Swiss Franc in the early European trading hours, currently trading at 1.0790. We see the selling tone to continue in today`s trading, although in low volatility, after that some upward correction to the 1.0820 level is possible.
USD/JPY
Against the Yen the Dollar has lost its upward momentum in Asian trading, and continues to loose ground in early European trading, right now priced at 95.95. A sideways market is about to emerge now, limited to between 96.80/96.10 trading band.
