Don’t trust summer rallies in the stock markets. They usually happen in low volume, with the big players absent in the market. That may explain why the dollar was not influenced last Friday in its usual inverse action with the equity markets. The theory so far is that a reviving stock market in the U.S. will mean a reviving U.S. economy and therefore resurrection of inflation, which would be a big negative for the dollar.

Coming from higher levels, the USD is under slight pressure this European morning. We expect some further up movements for today’s trading, although in low volatility, as explained in our major pairs’ list below. There are no market-moving fundamental data scheduled for today.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
This market is trying to recover in this European morning in low volatilitly and is currently trading at 1.4170. We expect this move to come to a halt at the 1.4210 level, giving way to another downmove to the 1.4050 mark.

GBP / USD
Currently trading around 1.6440, the pound seems to stabilize around this level in early European trading. We do not see that stabilization holding for long in today’s trading, rather some more downside risk towards the 1.6350 levels.

USD / CHF
The dollar halted its recovery against the Swiss franc in the early European trading hours and is currently priced at 1.0830, near resistance around 1.0900. We see that level being tested again today, but not broken.

USD / JPY
Acting slightly weaker against the yen in late Asian trading, the dollar seems to be continuing this trend in European morning trading. Currently priced at 96.75, we see some more downward move in low volatility, leading eventually to 94.30.