There are two things benefitting the euro, most probably until the end of this year. First, there is the gradually delayed aspect of quantitative easing of the ECB in contrast to the U.S. Fed, the latter being mostly finished with that, while the ECB is still working on the job. True, the process of monetary printing by buying up bonds is a little more difficult in Europe, with its fragmented bond markets. But the outlook of big capital gains in the bond markets - especially the German Bunds, is luring - forget about the ridiculous dividend. This is possibly what helps the British pound, too. That was the same case early in this year, with Treasury Bonds in the U.S., therefore the stronger dollar. Second, there is the aspect of new members in the Eurozone, 16 so far. Romania and Bulgaria are in the focus, probably with others to come. Buying up bonds there, when they are low, brings quick and big profits in the short term, once the interest would fall because of euro membership. It worked well with Portugal and Spain in 1999, with Greece in 2001, Cyprus in 2008 and in Slovakia in 2009. We therefore reckon with a high level of the euro for the rest of the year, interrupted by small corrections.
For today’s trading, we expect another bout of weakness in the dollar against the majors, having now tested its lows for 2 days, while correcting the oversold status already. Have a look at the detailed description below, with favorable entry and turning points for today’s trading hours. There are two fundamentally market-moving indicators scheduled for today, U.S. retail sales and U.S. producer prices, both for August, at 14:30 CET.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The thin market this European morning ran into stop-loss selling, now trading at 1.4590. We think that downward correction will be shortlived, soon to be replaced by a recovery up to the levels around 1.4650 again.
GBP / USD
The pound underwent a downward correction in early European trading, but held up remarkably well at the support zone near 1.6590, with the market currently at 1.6605. We expect upmoves for today’s trading, leading to levels around 1.6640.
USD / CHF
In another up correction move, the dollar is trading at 1.0395 against the Swiss franc, up from new lows around 1.0300. We see these lows being tested today, and then an even lower market.
USD / JPY
On a solid recovery move in Asian and early European trading, the dollar is now at 91.10. We expect this recovery move to continue in today’s hours, leading to highs around 91.90.
For today’s trading, we expect another bout of weakness in the dollar against the majors, having now tested its lows for 2 days, while correcting the oversold status already. Have a look at the detailed description below, with favorable entry and turning points for today’s trading hours. There are two fundamentally market-moving indicators scheduled for today, U.S. retail sales and U.S. producer prices, both for August, at 14:30 CET.
by George Clement
Intraday Market Outlook for Day Traders
EUR / USD
The thin market this European morning ran into stop-loss selling, now trading at 1.4590. We think that downward correction will be shortlived, soon to be replaced by a recovery up to the levels around 1.4650 again.
GBP / USD
The pound underwent a downward correction in early European trading, but held up remarkably well at the support zone near 1.6590, with the market currently at 1.6605. We expect upmoves for today’s trading, leading to levels around 1.6640.
USD / CHF
In another up correction move, the dollar is trading at 1.0395 against the Swiss franc, up from new lows around 1.0300. We see these lows being tested today, and then an even lower market.
USD / JPY
On a solid recovery move in Asian and early European trading, the dollar is now at 91.10. We expect this recovery move to continue in today’s hours, leading to highs around 91.90.
