Despite the slight bullish technical market picture, the USD has not enough steam left to develop a clear upward stance, as shown in the market scene this European morning. Depressing the currency, of course, is the undebated early inflationary outlook but, on the other hand, it is supported right now by stock markets still undecided about the expected recovery of the economy. In times like these, as experienced for about 6 months now, we prefer to rely on chart-technical aspects, which today are showing a soon overbought situation in the EUR / USD, for example.

Accordingly, we see a selling tone for the USD first, but later a bid market to develop today, between the trading bands projected below in the majors. The U.S. leading indicators for May could have an impact on the market, published at 16:00 CET - expected is another rise from still negative territory.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
Having so far unsuccessfully attacked the 1.3980 resistance level in this European morning, the pair is on a slight retreat right now, trading currently at 1.3940. We expect another testing of the 1.3980 level today, but then a downward move to the marks around 1.3830.

GBP / USD
Cable already lost ground in early European trading, from highs around 1.6410 to now 1.6230. More volatile today than the EUR / USD, we expect a recovery to set in soon, to a maximum of 1.6310, and afterwards a downmove exceeding the recent lows.

USD / CHF
The dollar is trading in a quiet early European market against the Swiss franc, consolidating its somewhat lower levels, right now at 1.0780. We see that level more or less holding in today’s trading and, later, recovery moves up to 1.0880.

USD / JPY
The narrow trading band of the dollar against the yen in Asian trading continues in the European morning hours, between 95.90 and 95.65, right now at 95.80. We expect a break of the lower levels at 95.65 today, leading to prices around 94.50.