The debate whether the dollar will soon fall because of a better world economy, or not, is still going on. Better global stock markets are still nourishing the expectation that the U.S. economy is recovering, and it will be the first to go into inflation, because of the mammoth monetary and fiscal expansion. But as the summer holiday is knocking on the door, both the Forex and the global stock markets will experience wild swings as they have in the past. We therefore stick to our careful stance when it comes to sky-high market expectations, especially in the EUR / USD, where we think the market is heavily overbought.

Accordingly, and in the absence of market-moving data for today, we expect recovery potential for the USD in today’s trading, although in low volatility. See the details in the list of the major pairs below.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
In an unbroken upmove, the pair is again hovering just below the 1.4300 handle level this European morning, although in low volatility, and is trading right now at 1.4270. We do not see the resistance level being broken today, and rather expect downmoves to 1.4230.

GBP / USD
The pound also developed a bid mood against the dollar in early European trading, right now at 1.6520 just below a major resistance zone. We expect a retreat from this zone today, to levels around 1.6450.

USD / CHF
The dollar is in a weak recovery mood so far against the Swiss franc, trading right now at 1.0666. We expect the recovery to gain more steam in today’s trading, leading to the 1.0770 level.

USD / JPY
After a dull Asian session, the dollar quickly lost 80 pips in early Europen trading against the yen, and is currently trading at 94.60. This is also a short-term support zone, which we expect to be broken on the downside today, to levels around 94.30.