The attacks on the USD continued yesterday, but eased somewhat in late Asian trading and came to a halt in the early European market. Clearly, there is still a positive mood in the global stock markets, putting a lid on the Greenback. But the summer holiday season, which is traditionally accompanied by low volatility, is knocking on the door. We doubt that the current optimism in the equity markets will last until Thanksgiving, which will bring renewed support for the USD.

So we stick to the technical indicators, which speak of a still oversold dollar, but is due to recovery soon. There will be low volatility today, but there are still some trading possibilities as we describe below in the major pairs. There are no market-moving news scheduled for today, except perhaps Mr. Bernanke's semi-annual speech to the Senate financial committee.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The narrow sideways trend continues this European morning, currently at the lower end of it, and right now at 1.4190. We expect the downward resistance at 1.4170 to be broken today, leading to levels around 1.4120.

GBP / USD
Cable is correcting further down, from heights around 1.6550 yesterday to now 1.6370. We expect the market to find support but not before the 1.6290 mark, where a sideways movement in low volatility can set in.

USD / CHF
The dollar traded slowly lower against the Swiss franc in early European hours, still following the long-term support line between 1.0650 and 1.0700, and is trading right now at 1.0680. We expect this support zone to hold in today’s trading, giving room for recovery movements to a maximum of 1.0750.

USD / JPY
After a dull Asian market, the dollar continues to trade in low volatility against the yen and is currently trading at 93.50. We expect the narrow trading band to remain today, between the 93.70 and 93.30 level.