The question may sound a little too careful, considering the optimism in the stock markets and signs of improvement in the economic indicators. But still, the equity market might already be overshooting - technically these markets are in a clearly overbought situation now. And at the economic front there is only very slow improvement out of last year’s miserable conditions. We believe that the recovery continues, slowly but steadily, while the world economy undergoes a new more prudent and careful outlook. This is already visible in the United States, where the consumer binge for the last 25 years obviously ended this year, and will not regain its old status for a long time. What does this mean for Forex? Simply, the volatility will shrink further, since this new phenonemon will be a longer-term one. We concentrate on intraday trades, but we also keep in mind that the current trading bands will remain intact for the rest of this year, despite repeated talk of replacing the world’s only reserve currency, the dollar, with the euro, or even the Chinese yuan.
We also are aware of the usual low summer volatility setting in now, and therefore concentrate on short engagements, if any, preferably in the GBP / USD, where the market movements are more lively compared to others. Note today’s market-moving data, the BoE publication of its current monetary policy at 13:45 CET, and the ECB’s policy at 13.45 CET. Unchanged interest rates are expected by both institutions.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
For three days now, the pair has been following a narrow band between 1.4430 and 1.4350. For today, too, we do not expect much change in this pattern. The market is currently at 1.4395 and, after a test of the upper range around 1.4430, we see another downmove to the lower one around 1.4350.
GBP / USD
Trading around its longer-term resistance levels at 1.7000, right now at 1.6985 against the dollar, the pound might well correct downwards today, leading to levels around 1.6850.
USD / CHF
The dollar is holding its low levels against the Swiss franc in early European trading, priced right now at 1.0620. We expect some recovery to come in today’s trading, testing the 1.0690 resistance level.
USD / JPY
The recovery of the dollar against the yen that began in late Asian trading continued in the early European market hours. Right now at 95.30 and at the upper end of a broader trading range, we expect some setbacks to come today, to levels around 94.85.
We also are aware of the usual low summer volatility setting in now, and therefore concentrate on short engagements, if any, preferably in the GBP / USD, where the market movements are more lively compared to others. Note today’s market-moving data, the BoE publication of its current monetary policy at 13:45 CET, and the ECB’s policy at 13.45 CET. Unchanged interest rates are expected by both institutions.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
For three days now, the pair has been following a narrow band between 1.4430 and 1.4350. For today, too, we do not expect much change in this pattern. The market is currently at 1.4395 and, after a test of the upper range around 1.4430, we see another downmove to the lower one around 1.4350.
GBP / USD
Trading around its longer-term resistance levels at 1.7000, right now at 1.6985 against the dollar, the pound might well correct downwards today, leading to levels around 1.6850.
USD / CHF
The dollar is holding its low levels against the Swiss franc in early European trading, priced right now at 1.0620. We expect some recovery to come in today’s trading, testing the 1.0690 resistance level.
USD / JPY
The recovery of the dollar against the yen that began in late Asian trading continued in the early European market hours. Right now at 95.30 and at the upper end of a broader trading range, we expect some setbacks to come today, to levels around 94.85.
