While the start of the week did not reveal much about the state of the economy, except that it is coming slowly out of the slump, the rest of the week will be different. All the indicators will be for the month of July, and it might well be that they will confirm a U.S. economy on a firmer footing. Since June, the stock markets regained their optimism, one of the seldom summer rallies, usually borne by too deep a pessimism beforehand. This has to be confirmed now by better economic data - with the usual pressure on the dollar because of inflation sorrows. Although we think it is still too early to worry about inflation yet, the inverse correlation of the USD with the Dow Jones is still quite visible.

Accordingly, we put our trading bands for the USD vs. the majors again lower today, as expressed in detail below. U.S. economic data scheduled for today are export and import prices and retail sales for July, published at 14:30 CET, and inventories at 16:00 CET.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The euro started another upmove against the dollar in early European trading and is right now at 1.4265, attacking the 1.4300 resistance line. We see that resistance being broken today, with a move against the 1.4350 level.

GBP / USD
On the upmove against the dollar as well this European morning, the pound is currently trading at 1.6570 and on its way to its intraday resistance lines. First we expect the 1.6600 resistance to fall, reaching levels later in the day near 1.6700.

USD / CHF
The dollar is continuing its low volatility market against the Swiss franc, currently on a slight downslope at the 1.0750 level. This also represents a support line, which we expect to be broken eventually, although in unchanged low volatility.

USD / JPY
After a quiet Asian session, the dollar is gaining ground against the yen in early European trading. Currently at 96.40 around the resistance at 96.50, we expect this resistance to be broken on the upside today, reaching levels around 96.90.