During the worst economic news at the beginning of the year, the world stock markets recovered, showing an unbroken optimism, and now, with the first fundamental proof that the world’s economy is out of recession, they falter. That puzzled many observers, reaching for that or another explanation. But you do not have to look far to find a reason for that: First, it is summer time, low volume and lots of prudent profit-taking before Thanksgiving Day. Second, any sign of a recovering economy will be taken as a signal for future inflation, because of the massive monetary and fiscal stimuluses injected into the world economy over the past 12 months. Stock markets hate inflation as well, the P/E expands, and the value shrinks. We think it is far too early to decide on that, but notice the present effect on the currencies as well. Especially on the USD, where we see some downward turn in the making this week.
Accordingly, we put the trading bands for the USD in today’s trading lower, as shown below in the major pairs’ list. Note the U.S. producer price index today, housing starts and housing permits, all for July, and scheduled for 14:30 CET. Further improvements are expected, which will have a dampening effect on the dollar.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
On an uptrend this European morning, this market seems to be attacking the 1.4200 resistance level again. Right now at 1.4130 and with the strength unbroken, we expect at test of the 1.4200 mark today. Later on, a sideways market between 1.4200 and 1.4150 could emerge.
GBP / USD
The pound caught a bid tone against the dollar in early European trading. Currently priced at 1.6450 from lows around 1.6290, we see that bid tone remaining today, although in low volatility. A maximum of 1.6500 is possible, from where downward corrections are to be expected.
USD / CHF
From oversold positions, the dollar recovered somewhat against the Swiss franc in the early European trading hours and is currently trading around the 1.0780 level. We do not see much recovery today and rather expect setbacks from around the present levels to the 1.0720 mark.
USD / JPY
With mild downward corrections against the yen, the dollar continued its upward trend and is currently trading at 95.05. We expect that modest uptrend to continue today, reaching price levels around 95.80.
Accordingly, we put the trading bands for the USD in today’s trading lower, as shown below in the major pairs’ list. Note the U.S. producer price index today, housing starts and housing permits, all for July, and scheduled for 14:30 CET. Further improvements are expected, which will have a dampening effect on the dollar.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
On an uptrend this European morning, this market seems to be attacking the 1.4200 resistance level again. Right now at 1.4130 and with the strength unbroken, we expect at test of the 1.4200 mark today. Later on, a sideways market between 1.4200 and 1.4150 could emerge.
GBP / USD
The pound caught a bid tone against the dollar in early European trading. Currently priced at 1.6450 from lows around 1.6290, we see that bid tone remaining today, although in low volatility. A maximum of 1.6500 is possible, from where downward corrections are to be expected.
USD / CHF
From oversold positions, the dollar recovered somewhat against the Swiss franc in the early European trading hours and is currently trading around the 1.0780 level. We do not see much recovery today and rather expect setbacks from around the present levels to the 1.0720 mark.
USD / JPY
With mild downward corrections against the yen, the dollar continued its upward trend and is currently trading at 95.05. We expect that modest uptrend to continue today, reaching price levels around 95.80.
