Despite a heavily oversold dollar, the market does not react much to stimulus effects, neither in the economy nor the financial world. The only thing that seems to work is still the inverse correlation between the stock market and the U.S. currency, implying that future U.S. inflation fears are still alive. That is happening now in low volatility, though, in face of the holiday season. But the dollar continues to meander around its support levels against the majors and we still expect some recovery moves in the near future. In a week with not much market-moving data, it probably needs the publication coming Friday of the U.S. GDP Q2 to provoke some real move. Today’s durable goods orders for June will be interesting, too, since there is a contraction expected against May. An unexpected improvement would weaken the dollar.

For today’s trading, we take some market and technical aspects for a stabilizing dollar as signs for further recovery today, as described in the major pairs’ list below.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
This market has lost its upward steam in early European trading and is currently priced at 1.4150. Some recovery moves may set in soon, but we do not expect much, i.e. not surpassing the 1.4200 level significantly. Further setbacks to the 1.4100 mark are more likely.

GBP / USD
Trading back from highs around 1.6550 to now 1.6390, the pound currently is testing its support zones at 1.6350 against the dollar. We expect these support zones to be broken today, leading the market toward the 1.6300 level.

USD / CHF
An uptrend in late Asian and early European trading brought the dollar to the current 1.0770 mark. We see more of this bid tone emerging today, bringing the market to levels around 1.0850.

USD / JPY
The dollar acted more strongly in this European morning against the yen, recovering from lows around 94.10 to the current 94.90. The market will experience further setbacks today, back again even below 94.10.